Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

GULL ISLAND PROTECTION BILL [Lords]

Read a Second time, and Committed.

Oral Answers to Questions — EMPLOYMENT

Youth Training Scheme

Mr. Ron Brown: asked the Paymaster General how many individuals are currently receiving YTS training in the Leith area.

The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): I regret that the information is not available in the precise form requested. However, at the end of February, the latest date for which statistics are available, there were 2,113 young people in training in the Edinburgh local authority district.

Mr. Brown: Having learnt the lessons of the case of James McCormack, will the Minister advise the Chancellor of the Exchequer to provide money to compensate trainees which have been injured or maimed through these cheap labour schemes? Will he tell the Chancellor that even a death grant must be provided to families who suffer fatalities? Is he suggesting that the Government, who are allegedly a caring Government, care only about profits and big business, not about the people who matter, particularly youngsters on youth training schemes?

Mr. Trippier: I am aware of the sad case of the hon. Gentleman's constituent and of the fact that compensation was made in that case. I find it very disquieting that the hon. Gentleman should try to rubbish the YTS by referring to it as cheap labour, just as I deplore the fact that the hon. Member for Kingston upon Hull, East (Mr. Prescott), the shadow spokesman on employment, chose to call the youngsters on the scheme skivvy labour. I cannot think of any greater insult to those young people.

Mr. Colvin: Is my hon. Friend satisfied that enough YTS places are provided by the Civil Service? If not, what can be done to encourage the Civil Service to provide more YTS places in Leith and elsewhere?

Mr. Trippier: My hon. Friend raises a topical issue. We are considering that matter.

Mr. Wainwright: Is it not a sad reflection on youth training in Edinburgh and elsewhere that, at the recent skill Olympics attended by 19 nations, at which 108 medals

were awarded for a great variety of skills, the United Kingdom obtained only two? They were awarded, not for engineering, electronics or manufacturing, but for ladies hairdressing and jewellery.

Mr. Trippier: The hon. Gentleman will have to look more positively at YTS. It is, after all, a well tried and proven scheme which has not been found wanting. A very high percentage of youngsters who have participated in it have found full-time employment or gone on to further education. That is what we are concerned about. We know that we have a success. That is why we are developing and strengthening it into a two-year scheme.

Wages

Mr. Tony Lloyd: asked the Paymaster General how the wages of the best paid 20 per cent. of employees have changed in relation to inflation since 1979.

The Parliamentary Under-Secretary of State for Employment (Mr. Ian Lang): Between 1979 and 1985 increases of about 13 per cent. for full-time men and about 19 per cent. for full-time women were exceeded by 20 per cent. of full-time employees.

Mr. Lloyd: Does the Minister not feel any shame in giving those figures to the House when, over the same period, the number of families on very low pay who have been forced to claim family income supplement has more than doubled? Why are we told that for the low-paid wage cuts will drive them to work, while for the high-paid nothing but massive pay increases are the order of the day?

Mr. Lang: I think that the hon. Gentleman may have his figures wrong. Under this Government the lowest paid 20 per cent. have enjoyed a real increase in income, as, with lower inflation, have many more people, whereas under the Labour Government that was all destroyed by inflation.

Mr. Heathcoat-Amory: Will my hon. Friend confirm that average wages are increasing in real terms? Does he agree that, although this is fine for those in work, it is bad news for the unemployed? Will my hon. Friend impress on the CBI, the TUC and other interested organisations that real wages are increasing less quickly in competing countries?

Mr. Lang: My hon. Friend is absolutely right. Average wages for men are increasing by about 10 per cent. and average wages for women are increasing by about 14 per cent. If we could achieve a 1 per cent. across-the-board cut, it might create about 100,000 new jobs.

Mr. Leighton: Is the hon. Gentleman aware that the highest paid register the least unemployment and the lowest paid register the highest unemployment? Is he aware that the Contract Cleaning and Maintenance Association told the Select Committee on Employment that, after a Treasury directive following abolition of the fair wages resolution, wages for cleaners in Government Departments and the number of staff were reduced? Has the hon. Gentleman noticed what is happening at the Driver and Vehicle Licensing Centre at Swansea where clearners on £27 a week have been asked to take a 30p per hour wage cut and to lose their holiday entitlement, and where staff numbers are to be cut from 139 to 102? Does that not make nonsense of pricing people into jobs? Is it not the Government's policy—

Mr. Speaker: Order. This is not an Adjournment debate.

Mr. Lang: May I reply to the hon. Gentleman with another example—the electrical contracting industry. In that industry wages for young people were reduced by one third and the number of apprentices recruited increased almost fourfold.

Mr. Prescott: Will the hon. Gentleman accept that the income increase in real terms for the top 20 per cent. has been far higher than the increase in real terms for those on low incomes? Low incomes have decreased and unemployment has occurred. Deregulation in the wealthy City sector of the market has meant more money and jobs for some but less for those on low incomes.

Mr. Lang: There has been a divergence as we moved from the distortions of the last Government's pay policy. The hon. Gentleman should bear in mind that our first Budgets in 1979 took out 1·3 million low-paid taxpayers left in the tax net by the outgoing Socialist Government.

Enterprise Allowance Scheme

Mr. Lawler: asked the Paymaster General what is the number and percentage of the total of people on the enterprise allowance scheme under 25 years of age.

Mr. Trippier: On 31 January 1986 there were 13,449 people—25·6 per cent.—under 25 years of age out of a total of 52,516 currently in receipt of the enterprise allowance.

Mr. Lawler: I thank my hon. Friend for that encouraging reply, which shows that the spirit of enterprise is flourishing among young people. Is that proportion increasing? Will my hon. Friend assure the House that every opportunity will be made available to trainees to give them guidance and encouragement on how to become self-employed and how to set up their own businesses?

Mr. Trippier: The figure has increased since the scheme went nationwide on 1 August 1983. The number of young people involved in the enterprise allowance scheme has increased from 17·2 to 25·6 per cent. I shall certainly give my hon. Friend the assurance that he seeks. A number of programmes are already developing, even in YTS; in which we are trying to stimulate the expansion of enterprise. A number of those youngsters are now working for themselves.

Mr. Bellingham: Is my hon. Friend aware that a significant number of youngsters in King's Lynn have applied to join the scheme but have been turned down? Does he agree that, although this is an excellent scheme, the criteria should be relaxed?

Mr. Trippier: The criteria will be relaxed as from 1 April, when we are reducing the qualifying period from 13 to 8 weeks. I make no apology for the fact that we still want anyone who applies for the EAS to have access to £1,000. If people do not have the wit to get access to £1,000, I very much doubt that they will ever have the wit to run successful businesses of their own.

Youth Wages

Mr. Sheerman: asked the Paymaster General if he will give the figures for the percentage increase in youth wages since 1979.

Mr. Randall: asked the Paymaster General what has been the change in wage levels for under 18-year-olds since 1979.

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): Between April 1979 and April 1985 the average earnings of girls increased by 77 per cent. and those of boys by 72 per cent.

Mr. Sheerman: Is the right hon. and learned Gentleman aware that those figures prove that the incomes of young people are increasing much more slowly than adult incomes? Is he aware also that youth unemployment is twice adult unemployment? Is it the Government's policy to prepare a large number of young people for low wages in a dual wage economy of the future?

Mr. Clarke: The hon. Member should be pleased that youth unemployment is falling so steadily in Britain. In the three years up to January 1986 unemployment among young people under 18 years fell by 13 per cent. It is important that young people should not expect too high a rate of pay in their first years of work before they acquire the training and experience of their older colleagues.

Mr. Forth: Does my right hon. and learned Friend agree that it is totally irresponsible for the Opposition and the trade unions to encourage young people to expect excessively high wages in the early stages of their careers? It is important for us to understand, as the Germans have, that while young people are undergoing training they must expect relatively low rates of pay so that they may justify the full rate when they are fully trained to do the job.

Mr. Clarke: I agree with my hon. Friend. The Opposition spokesmen no doubt calculate that it sounds attractive to young people, but their policies would price many more young people out of jobs. The attacks by the hon. Member for Huddersfield (Mr. Sheerman) on the youth training scheme are nothing short of disgraceful, as he has tried to discredit a successful scheme.

Mr. Nellist: If the Minister had given the figures for inflation alongside the figures that he gave in answer to my hon. Friend the Member for Huddersfield (Mr. Sheerman), they would have shown that for boys leaving school there has been a 12 per cent. fall in their net pay compared with adults in 1979, that there has been a 13 per cent. fall for girls, and that at the same time youth unemployment has trebled. It ill-behoves a Minister of the Government on almost £1,000 a week to tell young workers on £40 or £50 to cut their wages to get more jobs. Wages for youth have fallen and youth unemployment has trebled.

Mr. Clarke: The hon. Gentleman is ignoring the fact that it is only in the past two or three years that young people's pay has fallen relative to adults' pay. It is only in the past two or three years that the rate of unemployment among young people has fallen. That may be in conflict with the hon. Gentleman's policies, but the facts refute his claims.

Mr. Cockeram: Under the wages council's regulations, are not the wage rates for school leavers 60 per cent. of the adult rate? Is that not one of the highest school leaver rates in western Europe, and is it not a contributory factor to unemployment among school leavers?

Mr. Clarke: I entirely agree with my hon. Friend. That is why we have the Wages Bill before the House. We are


reforming a system that has priced too many young people out of the first job that they could have had when they left school.

Job Creation

Mr. Foulkes: asked the Paymaster General what steps he will take to co-ordinate growth and employment generating measures with other members of the European Economic Community.

Mr. Clarke: Within the European Council of Ministers, I have been pressing for a change in the agenda of the Social Affairs Council so as to give much higher priority to measures that will promote economic and employment growth within the member states. I am glad to say that there is now widespread agreement among our partners that we should discuss such measures based on sound economic policies which provide for the competitiveness of industry and commerce, the control of inflation and the adaptability of the labour market. I hope we shall be able to make further progress with discussions during the United Kingdom presidency in the second half of the year.

Mr. Foulkes: Does the Paymaster General agree with the Commission, which in its annual economic report said that safeguarding adequate demand is the task of Governments. It also stated that unemployment could be reduced by up to 40 per cent. in the next few years by a co-operative growth strategy. Will the Minister say exactly what he will propose in the Council of Employment Ministers to achieve that sort of growth strategy?

Mr. Clarke: There is a wide range of agreement within the European Council amongst Ministers from all countries and political persuasions that the economic policy based on the principles that I set out was the one to be followed. At the moment the OECD forecast for next year is that the level of unemployment in Europe will remain about stable. That is because it is expecting a fall in unemployment in the United Kingdom and in Germany, which will be offset by a rise in Socialist France and Italy.

Mr. Thurnham: As employment is growing much faster in this country than in the EEC as a whole, will my right hon. and learned Friend make sure that any co-ordination is in an upward direction?

Mr. Clarke: As the number of new jobs created in Britain appears to exceed the number of new jobs created in the rest of the Community, I believe that the Community would be well advised to pay heed to our experience.

Mr. Wigley: Is there not evidence that the imbalance between the "Golden Triangle" and the peripheral regions is still worsening? The principles that the Minister has enunciated this afternoon tend to exacerbate that trend. In view of that, will there not be some development of a strong regional policy within the EEC to get jobs into the regions around the periphery as well as in the centre?

Mr. Clarke: The Council of Ministers that I attend deals mainly with the social fund, but that proves of considerable benefit to Britain, particularly for those parts that are designated as priority areas. It is important that we continue to receive benefit from the social fund for the benefit of the less advantaged parts of the country.

Mrs. Kellett-Bowman: I welcome the fact that the European countries are at last pulling together in employment policies, but will my right hon. and learned Friend congratulate British industry, as he frequently does, on the fact that it has created more new jobs in the past seven years and that Britain has a higher proportion of people working than any other European country?

Mr. Clarke: I think that Denmark is slightly ahead of us. But, with that slight proviso, my hon. Friend is right to say that a higher proportion of people of working age in the United Kingdom are in employment than in any other EC country, with the possible exception of Denmark, and I hope that we can overtake it.

Labour Statistics

Mr. John Fraser: asked the Paymaster General how many people are now unemployed in Lambeth; and how many were unemployed on 14 April 1981.

Mr. Lang: On 6 February 1986 the number of unemployed claimants in the London borough of Lambeth was 26,362. Comparable figures for April 1981 are not available.

Mr. Fraser: Will the Minister take it from me that since Lord Scarman's inquiry was set up the number of people unemployed in Lambeth has at least doubled? To what extent do the Government take any responsibility for that?

Mr. Lang: The hon. Gentleman should also take into account the fact that the number of job vacancies in Lambeth has also been rising. Some 2,000 people in Lambeth are benefiting from our employment and training measures. The urban programme is also putting over £13 million into Lambeth.

Mr. Watts: By how much have the rates in Lambeth increased over the same period, and does my hon. Friend see any connection between the two increases?

Mr. Lang: My hon. Friend is on to a good point. Lambeth is one of the highest overspending authorities in the country. The rates rose 107 per cent. in the three years between 1982 and 1985, and a second year of rate capping is good news for business and employment in Lambeth.

Mr. Nellist: asked the Paymaster General on how many occasions since 1979 the method of counting unemployment has been altered.

Mr. Lang: Since 1979 there have been five changes which have had a discernible effect on the unemployment count, and three of them have been minor. As we announced on 19 February, a further change is about to be made to correct most of the current over-recording.

Mr. Nellist: Would not the effort expended on removing 1·25 million people from the unemployment register be better expended by the Government on a crash programme of public works, such as building houses, schools and hospitals? Is it not the final indignity for the Paymaster General to say, as he did five minutes ago, that youth unemployment in Britain has fallen, when he knows that there has just been a staistical change—a sideways shift into the youth training scheme—not the creation of real jobs for our youth?

Mr. Lang: The hon. Gentleman takes an unduly gloomy view of these matters. His interest in statistics has


recently been confined to trying to discover which 50 constituencies have had the biggest rise in unemployment in the past year. I hope that he was not too disappointed that Coventry, South-East was not among them. Unemployment in Coventry, South-East fell by 1·33 per cent.

Mr. Maclean: Will my hon. Friend admit that it is disgraceful that under all Governments those in self-employment and the armed forces have been ignored in compiling unemployment figures? Does he agree that any change which takes account of the excellent job done by our men and women in the armed services and the self-employed is to be welcomed by both sides of the House?

Mr. Lang: My hon. Friend is right. Self-employment has been increasingly important in recent years and now accounts for the highest proportion of the total in employment since 1921. The House might also like to be reminded that the previous Labour Government changed the method of counting. In March 1976 they excluded adult students, which at some times of the year could affect the count by 200,000.

Mr. Flannery: Is not the reason why the Minister could not give comparable figures for 1981 that since then there has been another trick in the method of counting the unemployed by the removal of people over 60 and he will not give any figures once a change has been made, but pretends that they do not exist?

Mr. Lang: I am not sure whether the hon. Gentleman thinks that we should have left figures that we knew to be inaccurate or whether he believes that we should publish accurate figures, as the hon. Member for Kingston upon Hull, East (Mr. Prescott) has agreed should be the case. Among the changes that we have instituted, two of them—fortnightly registration and the inclusion of the severely disabled—have increased the count by 20,000 and 23,000 respectively.

Mr. Ashby: When will a proper analysis of the unemployment figures be made so that we might see the true number of people who are unemployed? Many people will ask how a Government can possibly plan for the future without an accurate knowledge of those who are truly seeking work?

Mr. Lang: As my hon. Friend knows, we are working towards producing a more comprehensive and helpful picture of the unemployed. I am sure my hon. Friend recognises that the unemployment count is based on a kind of snapshot taken on one day of the month. On average, 30,000 people find a job on every working day, which shows how impossible it is ever to have total accuracy.

Ms. Richardson: Does the Paymaster General agree that the exclusion of some married women from the register gives a wholly distorted picture of the number of people wanting work? Will he give the House an estimate of the number of women, for example, who are left out of the register who are ready for work but cannot find childcare provision or someone to look after an adult dependant?

Mr. Lang: I do not have those exact figures with me. However, the hon. Lady may know that part-time employment of women has risen by over 500,000 since 1979. There are people included in the count who are not seeking work, but it is also true that there are people not included who are seeking work.

Mr. Wainwright: Will the Minister get his statisticians, at the same time as they refine the count of those claiming benefit, to publish a monthly estimate of the large number of people who have no benefit to claim but are unemployed and are actively seeking work?

Mr. Lang: There are 870,000 people looking for work who are not on the count and claiming benefit, but, according to the same labour force survey, there are 940,000 people who are not looking for work who are in the count.

Mr. Butterfill: Will my right hon. and learned Friend comment on the observation by the hon. Member for Coventry, South-East (Mr. Nellist) that we should spend more money on building hospitals, and compare this Government's programme of hospital building with that of the previous Labour Government?

Mr. Lang: My hon. Friend is absolutely right. Our capital investment programme bears comparison with that of any other Government.

Special Employment Measures

Mr. Dixon: asked the Paymaster General when he now expects to respond to the Employment Committee's report on special employment measures and the long-term unemployed; and if he will make a statement.

Mr. Kenneth Clarke: We are studying the report very carefully and will submit a detailed memorandum to the Committee as soon as possible.

Mr. Dixon: That answer is not good enough. Is the Paymaster General aware that in my constituency 3,885 men and women have been out of work for over a year and that 43·1 per cent. of those unemployed are long-term unemployed? When will the Paymaster General get off his backside and do something positive about it?

Mr. Clarke: I agree with the hon. Gentleman that the long-term unemployed are now our most serious social problem. They are not yet sharing fully in the recovery in the jobs market. I would also point out that in the hon. Gentleman's own area of south Tyneside we have greatly increased the amount of adult training that we are giving to people to enable them to be better equipped for jobs. Over the years from 1984–85 to 1985–86 the numbers receiving adult training increased from 1,752 to 4,800. That is a 174 per cent. increase in the south Tyneside area.

Mr. Ralph Howell: Does my right hon. and learned Friend accept that until we operate the work test we shall never know the true unemployment levels? Is any work being done on the possibility of instituting a proper work test and work fare measures?

Mr. Clarke: All those on the count currently should be genuinely available for work. The most recent labour force survey showed that over 9,000 had not looked for work recently. We also know, as people have said, that there are those not on the count who are seeking work. The trouble is that every time we try to improve these obvious imperfections in the figures the Opposition raise cheap jibes of fiddling because they do not really want to know the true position.

Mr. Meadowcroft: Is the Paymaster General aware that there are many voluntary groups which are already doing job creation along the lines recommended in the


Select Committee's excellent report and that they are stifled and inhibited from doing more only by the Manpower Services Commission's bureaucratic regulations? Will the right hon. and learned Gentleman examine the possibility of relaxing the regulations to enable more work to be done along the lines of the report?

Mr. Clarke: The Manpower Services Commission has greatly increased the direct employment measures and training provisions that it provides on behalf of the Government. I will always look at examples of bureaucracy getting in the way of expansion of that, but the community programme, in particular, has been expanded flat out recently and I do not think that it would be practicable to take more people on it.

Mr. Evans: Will the Paymaster-General confirm that there are now more than 1,350,000 people classified as long-term unemployed in this country, that more than 550,000 of them are men aged over 50 and that that is a tragic waste of one of the nation's greatest resources? Does the Paymaster General appreciate that the message of the Select Committee on Employment was a ray of hope to those people? Why does he not accept it and give them more hope?

Mr. Clarke: The hon. Gentleman knows that we have been concentrating in nine pilot areas on measures that can give help to the long-term unemployed. We have been able to offer individual assistance to the long-term unemployed by giving them a range of job opportunities and training, including the teaching of work application methods, which have benefited individually those who have come forward in our nine pilot areas. Although I share the aims of the Select Committee's report, its proposals are largely impracticable. For example, I do not believe that it would be possible to provide 100,000 one-year jobs for the unskilled and the untrained in the National Health Service and the social services. We have to look for practicable measures, and that is what we have been doing.

Mr. Rowe: When my right hon. and learned Friend last answered questions on this report he gave the very clear impression that he was working to prepare the ground for a guarantee for the long-term unemployed. Since then the chairman of the Manpower Services Commission has told the Select Committee that he could implement such a guarantee, were it to be introduced. I wonder whether this means that my right hon. and learned Friend can bring forward the time when we can look for a guaranteee for at least some of the long-term unemployed?

Mr. Clarke: I have been trying out various ways of bringing additional help to the long-term unemployed. I have visited a scheme in Bolton that offers a guarantee of employment to those who have been unemployed for three years or more. My hon. Friend must await the results of all our considerations.

Youth Employment

Mr. Pike: asked the Paymaster General if he will make a statement on the levels of youth employment.

Mr. Trippier: Our youth training measures will help young people to take advantage of the extra jobs which our economic policies are producing.

Mr. Pike: Are the Government not concerned about the very serious high level of real unemployment among

the young? Are they not concerned about those who will leave the youth training scheme in April? No provision has been made for them. They will face real unemployment. When will the Government take positive steps to get the young people of this country into jobs?

Mr. Trippier: I cannot believe that the hon. Gentleman heard the replies that were given by my right hon. and learned Friend about the reduction in the level of unemployment among the young. Between January 1985 and January 1986 there was a reduction of 10,900 in the number of young people out of work. Far fewer young people are out of work this year than were out of work last year. That is a smaller proportion of the total number of people who are unemployed.

Mr. Nicholas Baker: Will my hon. Friend draw to the attention of a wider audience the extraordinary potential for developing self-employment and encouraging enterprise that the Genesis programme offers within the youth training scheme? Is my hon. Friend able to assure me that the Genesis programme has a secure future?

Mr. Trippier: I have been very impressed by what I have seen of the Genesis programme. It is a management agency which is trying to develop the ethos of self-employment among youth training scheme trainees. Many of those who are on the scheme have set up in business on their own account. I understand that some of them are employing others. The Manpower Services Commission is working on a module which will try to develop and strengthen enterprise within the YTS programme.

Mr. Janner: Does the Minister understand that the continuing and cavalier dismissal of the recommendations of the Select Committee on Employment concerning youth unemployment and general unemployment is disgraceful and that his right hon. and learned Friend has again said that many of the proposals are impracticable? However the Government may massage the unemployment figures, the fact is that this Government are presiding over the highest level of youth and other unemployment in the history of this country and that they are doing very little about it.

Mr. Trippier: I have adequately covered the hon. and learned Gentleman's last point. There has been a reduction in the number of unemployed young people under the age of 18. We are not in any way treating in a cavalier fashion the Select Committee's recommendations. They will receive our full consideration. However, what we want to know, and what my right hon. Friend the Chief Secretary to the Treasury wants to know from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), is who will pay the bill at the end of the day.

Mr. Greenway: Does my hon. Friend agree that most of the young unemployed had few or no qualifications when they left school and that the teachers' strike has not helped them? Will his Department do everything possible to bring the teachers' industrial action to an early end?

Mr. Speaker: Order. That is very wide of the question.

Mr. Trippier: I am grateful to you, Mr. Speaker, for drawing my hon. Friend 's attention to the fact that that is not a matter for me. However, the point raised earlier by my hon. Friend is a matter for me. There is clear recognition by the Government that our young work force lacks skills. There is a shortage of young people trained in skills, and we have therefore designed programmes and schemes to cope with that.

Mr. Sheerman: May I puncture the Minister's complacency by telling him that one third of a million young people are unemployed and have never been employed? Is he aware that it would take a tripling of the community programme to cater for those up to the age of 25? What do the Government propose to do about the one third of a million young people who have never worked?

Mr. Trippier: We are by no means complacent about the level of youth unemployment. We have been working hard trying to develop schemes and programmes to help those youngsters get jobs. We are clearly on the right lines, as shown by the figures that have been given by my right hon. and learned Friend and by myself.

Lost Working Days

Mr. Gale: asked the Paymaster General how many working days have been lost in industrial disputes over the last 12 months for which figures are available.

Mr. Kenneth Clarke: A provisional total of 4·4 million working days were lost through stoppages of work due to industrial disputes during the 12 months to 31 January 1986.

Mr. Gale: Does my right hon. and learned Friend agree that there has been a marked improvement in the industrial relations record of recently privatised industries? Does he further agree that that strengthens the case for the early privatisation of other major nationalised industries?

Mr. Kenneth Clarke: The figure that I have cited includes nearly 2 million days that were lost during the miners' dispute in the year in question. I agree with my hon. Friend that when one looks at the number of stoppages in the year to January 1986, one sees that the figure is the lowest that we have had since the comparable period up to January 1936–50 years ago. There has been a welcome improvement in industrial relations, particularly in the private sector of industry.

Mr. James Lamond: Does the Minister not realise that any drop in the figures is not due to workers being more content with their lot under this Government, but rather is due to the fear of unemployment that hangs over the head of every employed person? The trade unions have been so fettered by the Government that they are afraid to bring out their members to exercise the right that they have had for the whole of this century—the right to stop work if they are dissatisfied with their conditions.

Mr. Clarke: A great deal of the improvement has to do with the introduction of democracy into the trade union movement—pre-strike ballots and the free and secret election of those who lead the trade unions. Those improvements are threatened by the proposals being brought forward by he trade union and labour movement, which, I understand, are to be considered by a conference tomorrow.

Mr. Tim Smith: How many working days were lost because of industrial disputes in the last 12 months of the last Labour Government?

Mr. Clarke: Off the cuff, I do not remember the number of days lost in the winter of discontent, but certainly that was one of the worst years most of us can recall and it shows how dramatic has been the improvement since this Government came to power and improved our industrial relations system.

Mr. Prescott: Will the Paymaster General tell us whether he has carried out a comparison between the last six years of the Labour Government and the six years of this Government? I readily concede that the numbers of disputes has fallen by half, but does he not accept that the number of working days lost is almost approximately the same? That means that the average number of days lost per dispute has risen from 5,000 to nearly 9,000. That is a reflection of the bitterness and the length and cost of strikes and is the result of the Government's trade union legislation.

Mr. Kenneth Clarke: The hon. Gentleman knows that there is a simple reason why our record is much better on the number of disputes but is almost comparable on the number of days lost. It is because of the huge number of days lost in one dispute, the miners' dispute, which was the last fling of violent, undemocratic industrial action and was supported by the Opposition.

Mr. Stokes: Is it not a great mercy that beer and sandwiches no longer need to be provided at 10 Downing street because strikes no longer take place?

Mr. Kenneth Clarke: We have far fewer disputes and we have long given up the ridiculous process of trying to settle them over beer and sandwiches at 10 Downing street or at the Department of Employment.

Labour Statistics

Mr. Loyden: asked the Paymaster General if he will give the latest figure of long-term unemployed in the Merseyside travel-to-work area.

Mr. Lang: On 9 January 1986, the latest date for which figures are available, 55,814 claimants in the Liverpool travel-to-work area had been unemployed for over one year.

Mr. Loyden: When will the Government recognise that unemployment is not a matter of statistics but represents human misery? In the Merseyside travel-to-work area the figure is a scandal. Nothing is being done by the Government about the problem. The bankruptcy of their policies is now exposed. When will they recognise that they have to do something positive for the long-term unemployed?

Mr. Lang: We certainly recognise the misery and anxiety behind the statistics of the unemployed. We are concerned about the problem and are anxious to help. That is why the Government have a wide range of schemes, which are designed specifically to bring help to the long-term unemployed in Merseyside and elsewhere.

Mr. Cash: Does my hon. Friend agree that the unemployment level in Merseyside is so high because of the disgraceful behaviour of councillors in that area?

Mr. Lang: My hon. Friend has a good point. If the public relations policy of councillors, let alone the way in which they run the council, was better, the many good things about Merseyside would become apparent. For example, the vast majority of firms in Merseyside have never been involved in industrial disputes.

Mr. Alton: Is the Minister aware that 78,000 men and 29,000 women in the city of Liverpool alone are currently out of work? Is he aware that prerequisites for employment are a willingness on the part of the local authority to show


less aggression and confrontation and a willingness on the part of the Government to provide a major infrastructure scheme to take skilled people off the dole?

Mr. Lang: The hon. Gentleman is right about local government. In regard to the role of the Government, I must tell him that Government aid to Merseyside amounted to over £1 billion in the last year, so nobody can say that the Government have not been giving help to Merseyside.

Long-Term Unemployed Persons

Mr. Holt: asked the Paymaster General if there are any indications of the effect of in-depth counselling sessions on the employment opportunites of the long-term unemployed.

Mr. Kenneth Clarke: On 6 January 1986 we established a scheme in nine pilot areas to find out whether the long-term unemployed would benefit from individual help and advice. Of those seen, 80 per cent. have been submitted to a job or to other employment or training opportunities, which should enhance their employment prospects.

Mr. Holt: I am grateful to my right hon. and learned Friend for that reply, which is most encouraging. Will he extend that policy to new areas, including my constituency? When he is doing so, will he consider the great problems of relocation for many people who can find jobs but for whom moving to a new house in another area is impossible?

Mr. Clarke: We have always said that we would draw such lessons as we could from our scheme in the nine pilot areas as quickly as possible. I take on board my hon. Friend's second point. A great difficulty faces people who leave areas such as his when they find employment in the south-east and have to find a home. I appreciate all the work that my hon. Friend has put in to assist his constituents.

Ms. Clare Short: Does the Minister understand that the cause of unemployment is not the inadequacy of the unemployed in applying for jobs? Does he agree that if the Government continue with these schemes we shall have the most sophisticated unemployed job applicants in western Europe? What we need is a change of economic strategy to provide real jobs at decent wages so that people can make a contribution to society. None of the Government's schemes will help.

Mr. Clarke: The hon. Lady ignores the fact that a rapidly increasing number of new jobs are being created in the economy and that there is a rapid increase in the number of vacancies being notified to jobcentres and remaining unfilled. One problem that the long-term unemployed often face, particularly in the more prosperous cities, is that they remain unemployed in a city where plenty of good jobs are available because they lack the skills. That is what we are trying to remedy.

Non-assisted Areas

Mr. Stern: asked the Paymaster General if he will seek European Economic Community funding for special measures to promote employment in non-assisted areas.

Mr. Lang: Support is already available from the European social fund for some types of training and

employment schemes in all parts of the country. While the fund's support is rightly concentrated on the areas of highest unemployment, we continue to support its role in promoting employment and training, particularly among disadvantaged groups, in all areas of the United Kingdom.

Mr. Stern: I am grateful for that reply. Does my hon. Friend agree that in many pockets outside the assisted areas, including some in my constituency, unemployment is every bit as high as, if not higher than, unemployment in assisted areas? Will he use his best endeavours to ensure that it is made easier for such pockets of unemployment to obtain the European assistance that is already available in assisted areas?

Mr. Lang: My hon. Friend is right. The boundaries for the priority areas are drawn up, not by us, but by the European Commission. Bristol has gained from the fund: over £1·5 million was spent there in 1985.

Youth Unemployment

Dr. Marek: asked the Paymaster General if he will give the figures for the percentage increase in youth unemployment since 1979.

Mr. Trippier: Direct comparisons of unemployment by age since 1979 are not possible because of changes in the way the figures are collected. However, between January 1979 and October 1982 the number of unemployed registrants in the United Kingdom aged under 25 increased by 148 per cent. Between October 1982 and January 1986 the number of unemployed claimants aged under 25 increased by 4 per cent.

Dr. Marek: Does the Minister agree that the figures he has now given to the House about the recent small decline in the number of unemployed youth are only there because he has failed to consider those numbers in relation to the total percentage of youth available for work; that his Department has fiddled the figures by readjusting them every two years; that he has taken many of the young off the unemployment register because of their employment in the youth training scheme; and that young people, if there were real jobs and if they had real training, would go for those real jobs? Would he further agree that he has presided over the highest level of youth unemployment in living memory?

Mr. Trippier: The hon. Gentleman cannot possibly say that the Department has fiddled the figures, when his hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) admitted on a television programme that if he had been in the same position as my right hon. Friend the Secretary of State he, too, would have accepted the advice of the Department's statisticians.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Fatchett: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Fatchett: Last week the Prime Minister said that it was the responsibility of individuals to secure their own homes against the rising crime wave. Could she now tell the elderly of this country who are this week faced with enormous winter heating bills how she expects them to pay for their increased security, or was her reply last week just another example of her not caring for the people of this country?

The Prime Minister: The elderly can get help with crime prevention through the community programme and through the urban programme. In general, it is the personal responsibility of people to secure their own homes against crime, and it is well within their resources, at a time of a record standard of living, to do so. I recognise that the moment personal responsibility is mentioned the Opposition run a mile.

Mr. Onslow: Will my right hon. Friend take this opportunity to congratulate British Aerospace on the spectacular success of its Giotto spacecraft as well as on the fact that, overall, British Aerospace has the largest order book of any British manufacturer? Will she also join me in wishing that the BBC and members of the Opposition would sometimes do more to proclaim the national and international achievements of that privatised company?

The Prime Minister: Yes, I gladly join my hon. Friend in congratulating British Aerospace both on its commercial success and on its excellent performance in research and development, evidence of which is the Giotto project, which excited many of us when we saw it on television last week.

Mr. Steel: Following her meeting yesterday with the chairman of British Airways, Lord King, and the apparent favouritism shown to the General Motors bid for Land Rover, will the Prime Minister take this opportunity to dispel the impression that she is hostile to management-employee ownership of firms?

The Prime Minister: We could hardly be that when we got a management buy-out for Vickers.

Mr. Hirst: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Hirst: Does my right hon. Friend agree that the right to freedom of speech is a hallmark of a civilised and free society? Does she deplore the recent behaviour of a vocal minority of troublemakers on our university campuses who have sought to deny that right to Members of Parliament, Ministers and even university professors?

The Prime Minister: Yes, I agree with my hon. Friend. Higher education requires freedom of thought and freedom of speech. It is not for people who expect to have that for themselves to seek to deny it to others. I believe that most people condemn that action and that most vice-chancellors, particularly after the statements they have made, will be very anxious to do all they can to ensure that it does not occur again.

Mr. Corbyn: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Corbyn: Is the Prime Minister aware that her Government's first Budget in 1979 gave away more than £2 billion to those earning more than £20,000 a year, and that since her election in 1979 her Government have given £15,000 million in tax benefits to the wealthiest sector of the country? At the same time, taxation rates have never been higher for those earning less than £20,000 a year and unemployment has never been higher? Does she not agree that her Government's record is one of selflessly working for the wealthiest minority in the country?

The Prime Minister: No, Sir. Income tax has been cut by £6 billion, which is the equivalent of £260 a year for a married man on average earnings. Real take-home pay for a married man on half average earnings has risen since 1979 by 11 per cent., compared with only 2·5 per cent. under Labour.

Mr. Neil Thorne: asked the Prime Minister is she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Thorne: Will my right hon. Friend take time to consider the extraordinary behaviour of the leaders of the Opposition in their attitude—[Interruption.]

Mr. Speaker: Order. The hon. Gentleman must ask a question about a subject for which the Prime Minister has responsibility.

Mr. Thorne: What is my right hon. Friend's response to the Opposition's behaviour—[Interruption.]

Mr. Speaker: That still does not fall within the Prime Minister's responsibility. The hon. Member can have one more go.

Mr. Thorne: Will my right hon. Friend consider the attitude of politicians who behave in such a way as to censor journalists acting for News International by refusing to contribute to its newspapers? Is that not one of the major reasons for the amount of violence on the picket lines at Wapping?

The Prime Minister: We totally condemn the censorship which is being practised in certain parts of the House against Mr. Murdoch and News International. We also condemn the censorship being practised against the Mirror Group in Scotland. We hope that others will join us in condemning such action.

Mr. Evans: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Evans: Why is the Prime Minister continuing her vindictive and cruel vendetta against the democratic, civil and individual rights of trade unionists at GCHQ?

The Prime Minister: My right hon. and learned Friend the Foreign Secretary is seeing the GCHQ unions later this afternoon. The hon. Gentleman will be aware of the action, which has been condemned, that Civil Service unions took during the strike, and of the selective action that they took against the security organisations upon which we depend so much for our defence.

Mr. Jim Spicer: Will my right hon. Friend accept the thanks of all the workers at Westland Helicopters for the efforts that she made on their behalf to secure the Indian contract?

The Prime Minister: The Indian order for Westland Helicopters has now been signed. That is a great relief and is very welcome. I first broached the subject with Mrs. Gandhi many years ago.

Mr. O'Neill: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. O'Neill: Will the Prime Minister tell the House and the country why she felt it more important to address Conservatives in Lowestoft last Saturday than to pay tribute to Olof Palme at his funeral?

The Prime Minister: I hope—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: I hope that most people will understand that party political conferences, which are fixed from year to year, naturally command the attention of a leader. I shall be attending Mr. Palme's memorial service on Thursday morning.

Mr. Crow: Will my right hon. Friend confirm that it remains the Government's policy to return British Airways to genuine public ownership at the earliest possible moment?

The Prime Minister: Yes, Sir.

Mr. Kinnock: Is the Prime Minister aware that many hundreds of worthwhile and vitally necessary, voluntary organisations in various localities have not yet been told whether they will continue to receive support after the Greater London council and metropolitan county councils cease to exist at the end of this month? As she must recognise the value of those organisations, and as her Ministers gave assurances about the continuation of support for them, will she ensure that emergency attention is given before 1 April?

The Prime Minister: As the right hon. Gentleman will be aware, many of the obligations were taken over either by central Government, as is the case with many organisations linked with the Arts Council, or by local authorities. Local authorities must consider those matters that have not yet been satisfactorily resolved.

Mr. Kinnock: In view of the Government's undertakings and the nature of many of the organisations, such as Age Concern, the widows' organisation, Cruse, playgroups and pensioner groups, will she accept that it is unfair to inflict further worries on the people who run voluntary organisations and on the many people who use them? Will she revise her answer to ensure that the Government accept their full responsibility?

The Prime Minister: The Government already give many headquarters grants to an enormous number of voluntary organisations. Indeed, speaking from memory, I think that taxpayers give more than £400 million to voluntary organisations.

Mr. Nicholas Winterton: Is my right hon. Friend aware that Macclesfield district is one of the best in the

country for youth training and youth employment prospects because of the responsible local authority in the area and the positive attitude of employers? Of the 2,000 school leavers on the last occasion, only 35 are now unemployed. Does that not give her encouragement that her policies are working? Even at this late stage, will she prevail upon the Chancellor of the Exchequer not to impose any added costs on industry and commerce?

The Prime Minister: On the latter point, my hon. Friend must await what the Chancellor of the Exchequer has to say. I congratulate my hon. Friend's local authority on its work with youth training schemes. It is important that we have the co-operation of local authorities and the supreme interest of employers. I congratulate my hon. Friend on what the local authority has done, and commend its example to others.

Oswaldtwistle

Mr. Hargreaves: asked the Prime Minister if she has any plans to pay an official visit to Oswaldtwistle.

The Prime Minister: I have at present no plans to do so.

Mr. Hargreaves: The people of the Quadrangle area of Oswaldtwistle will share my disappointment at that reply. Does my right hon. Friend agree that home improvement grants are the most cost-effective method of providing decent houses for our people? If so, will she have a final word with our right hon. Friend the Chancellor of the Exchequer so that he also gets the message?

The Prime Minister: Home improvement grants have been an excellent way of renovating many houses. and the level is still comparatively high compared with what it was when we came to office. A number of good rehabilitation schemes involving housing associations and the Housing Corporation have raised the standard of housing in my hon. Friend's area. Instead of bringing the bulldozer in, they have done up some terraced houses, to the great benefit of the people who live there.

Engagements

Mr. Meadowcroft: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Meadowcroft: Does the Prime Minister accept that the growing differential between pay for those in work, who have increased their rates beyond the rate of inflation, and those out of work is an embittering factor in our society? Will the Government's post-Budget policies narrow that differential and reduce the bitterness?

The Prime Minister: The hon. Gentleman is correct in saying that most people in work have had substantial pay increases and increases in net take-home pay. How much those out of work get depends on their particular circumstances and social security benefits. In some cases it is necessary to widen the gap between what they receive in social security benefits and what they receive in work.

Mr. Grylls: Is my right hon. Friend aware that most people will applaud the Government's decision to allow Vickers Shipbuilders to be returned to the private sector by means of a management buy-out? Will she assure the


House that the Government will give careful consideration to the proposed management buy-out from Land Rover group, which has blue chip financial backing, and will allow the company and the people who work in it to enjoy the future success of Land Rover?

The Prime Minister: My right hon. Friend the Secretary of State for Trade and Industry is giving close consideration to all the bids for parts of British Leyland, and will make a statement when he is in a position to do so, but that is not yet.

Mr. Wigley: Will the Prime Minister find time today to take to heart the anger of the leaders of disablement organisations at the intention of the Government to emasculate the Disabled Persons (Services, Consultation and Representation) Bill, which provides for those most in need, the carers who look after disabled people? Will the Government reconsider their position?

The Prime Minister: As hon. Members will know, the Government's position is to try to secure a Bill that is workable and that will continue to be so. I must also point out that the record of this Government on providing increased help for the disabled is outstanding, and greatly exceeds that of any previous Government.

Mr. Martin: asked the Prime Minister if she will list her official engagements for Tuesday 18 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Martin: Is it not madness that British Rail is closing railway workshops at a time when our railway engineering stock needs modernising? Will the right hon. Lady intervene in this matter?

The Prime Minister: As the hon. Gentleman is aware, some of the new rolling stock requires much less maintenance and redesigning than the old, and we are not able to keep workshops open unless there is work for them to do.

Oral Answers to Questions — BILL PRESENTED

CHESTERFIELD BOROUGH COUNCIL (GENERAL POWERS)

Mr. Tony Benn presented a Bill to confer general powers upon the Chesterfield Borough Council; to restrict the powers of the District Auditor in relation to that Council; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Wednesday 19 March and to be printed. [Bill 106.]

Liverpool (Delegation)

Mr. Robert Wareing: On a point of order, Mr. Speaker. I want to ask for your guidance on an issue which has been raised in my constituency.
On 11 February I wrote to the Secretary of State for the Environment about the problem arising from the threatened closure of Croxteth park and Croxteth hall in my constituency. On 5 March I received an answer from Lord Elton, Minister of State. Among other things, he said that he did not believe that there was anything further that could be gained from meeting a delegation. I had asked him to meet a delegation from my constituency. Yet this morning my attention has been drawn to an article in last Thursday night's Liverpool Echo which states:
Lord Elton, a Minister from the Department of the Environment, met Mossley Hill MP David Alton and members of the Croxteth Community Forum to discuss the park's plight.
I have written to the noble Lord, because I believe that he must have known when he wrote to me, and must have had in his diary, the date of the meeting with the hon. Member for Liverpool, Mossley Hill (Mr. Alton). We need your protection, Mr. Speaker, when the Minister is not in this House to answer questions.
Yesterday, the right hon. Member for Chelmsford (Mr. St. John-Stevas) stated—I believe you would be in accord with that statement Mr. Speaker—that when issues arise in a Member's constituency, that matter should be the concern only of that Member. As the only Member representing the constituents of Liverpool, West Derby, I ask you to protect me from any usurper.

Mr. David Alton: Further to that point of order, Mr. Speaker. We also confirm that it is the job of any Member of this House when representations are made to take up grievances which concern—[Interruption.]

Mr. Speaker: Order. The point of order is to me. I cannot hear.

Mr. Alton: It is the job, Mr. Speaker, of Members of this House, when their constituents are employed in an institution, in whichever constituency it may be, or if their constituents use a facility, to take up that issue and to do their job on behalf of their constituents.

Mr. Speaker: I must say in reply to the hon. Member for Liverpool, West Derby (Mr. Wareing) that this took place last Thursday, and I think there would have been opportunities to raise it other than today. It is not a matter for me whether a Minister sees a delegation or not. The hon. Gentleman must take that matter up with the Minister. As to the other matter, it is a convention—the whole House knows this—that we do not take up cases in each other's constituencies. That is a convention to which I think we should hold.

WAYS AND MEANS

Budget Statement

Mr. Deputy Speaker (Mr. Harold Walker): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that at the end of the Chancellor's speech, as in past years, copies of the Budget resolutions will not be handed around in the Chamber but will be available to hon. Members in the Vote Office.

The Chancellor of the Exchequer (Mr. Nigel Lawson): The background to this year's Budget—

Mr. David Winnick: Is mass unemployment.

Mr. Lawson: —is the dramatic and unprecedented fall in the world oil price. [HON. MEMBERS: "Ah."] But the Government's objectives remain unchanged: the conquest of inflation and the creation of an enterprise culture. [Interruption.] And the Government's policies are unchanged, too: policies of sound money and free markets, not least, because these are the only routes to more jobs, and jobs that last.
So my Budget today will carry forward the themes of my two previous Budgets, and sow some seeds for the future. In the course of my speech, I shall begin by reviewing the general economic background to the Budget, and go on to deal with the specific issue of oil. I shall next discuss monetary policy and the fiscal prospect, both this year and next. I shall then turn to the question of direct help for the unemployed. Finally, I shall propose some changes in taxation designed to assist in achieving the economic objectives I have already outlined. As usual, a number of press releases, filling out the details of my proposals, will be available from the Vote Office as soon as I have sat down.

THE ECONOMIC BACKGROUND

I start with the economic background. The strength and durability of the current economic upswing continues to confound the commentators. We can now look back to five solid years of growth at around 3 per cent. a year. [Interruption.] Even more important, 1985 was the third successive year in which we secured the elusive combination of steady growth and low inflation—the first time this has been achieved since the 1960s. In 1985 as a whole, output grew by a further 3½ per cent., which was the highest rate of growth in the European Community, and higher than the United States, too. Within that total, non-oil exports grew by 7 per cent., to reach yet another all-time record.
Despite a marked slowdown in the growth of world trade from the heady pace of 1984, the current account of the balance of payments was in surplus for the sixth year in succession—this time by some £3 billion. Inflation ended the year at around 5½ per cent. and falling. Employment continued to rise, although still not fast enough to reduce the distressingly high number of people out of work. [HON. MEMBERS: "Record unemployment."] I shall have more to say about unemployment later. Manufacturing industry, the subject of so much ill-informed comment, had another successful year, with its


output up by 3 per cent., its productivity up by almost 4 per cent., and both its investment and its exports up by 6 per cent.
At the heart of this success lies a remarkable turn-around in productivity. In the six years prior to 1979, Britain's annual rate of growth of manufacturing productivity, at less than 1 per cent., was the lowest of all the Group of Five major industrial nations. In the six years since 1979, our annual rate of growth of manufacturing productivity, at 3½ per cent., has been second only to that of Japan.
Looking ahead, I expect 1986 to be a further year of steady growth with low inflation. Indeed, with output forecast to rise by 3 per cent., and inflation to fall to 3½ per cent., 1986 is set to register our best overall performance in terms of output and inflation for a generation. The pattern of growth should show a satisfactory balance, too, with exports and investment expected to grow rather faster than consumer spending as a whole—as indeed they have during the sustained upswing. But the uncertainties inherent in all these forecasts, good though their track record has been, are reinforced by constant reminders that we live in an uncertain and turbulent world.
One particularly difficult aspect of this is the febrile nature of the world currency markets. There has been some improvement here. The Plaza agreement between the Group of Five Finance Ministers last September has undoubtedly led to a more sustainable pattern of exchange rates worldwide. Since that meeting, the dollar has fallen by some 16 per cent. against the other major currencies as a whole, with the pound moving up by 7 per cent., the deutschmark by 26 per cent. and the yen by 36 per cent.—a pattern broadly in line with what those of us who were party to the agreement had hoped to see.
This process will be assisted further if the passage of the Gramm-Rudman amendment manages to secure its objective of a much-needed reduction in the United States budget deficit. Meanwhile, the Plaza agreement has already succeeded in reducing, at least for the time being, the dangerous protectionist pressures that were building up in the United States. Provided we are not over-ambitious, I believe that the Plaza accord is something we can usefully build on. But the most dramatic development on the world economic scene, and one of considerable importance to this country, has of course been the collapse in the price of oil.

OIL

I presented my Budget last year at the end of a 12-month coal strike. I observed at the time that it was a remarkable tribute to the underlying strength of the British economy that it had been able to withstand so long and damaging a strike in such good shape. We now have to face a challenge of a very different kind. Over the past few months, the price of oil has almost halved, and with it our prospective North sea oil tax revenues and earnings from oil exports. In real terms, the price of oil is now back to what it was at the end of 1973.
Not surprisingly, perhaps, this initially caused a fair amount of turmoil in the financial markets, with sterling under pressure. I decided that it was right to respond with an immediate 1 per cent. rise in short-term interest rates

in early January, and this helped to prevent the downward movement of the exchange rate from developing an unhealthy momentum of its own. But equally I thought it right to resist the pressure, which for a time was very strong indeed, to raise interest rates still further. That pressure in due course subsided, and, though the financial markets remain somewhat volatile, the mood has changed considerably, assisted by a modest but welcome reduction in interest rates overseas.
Meanwhile, let me repeat that there is no question whatever, and never has been any question, of the United Kingdom cutting back its oil production in an attempt to secure a higher oil price. In the first place, the whole outstanding success of the North sea has been based on the fact that it is the freest oil province in the world—[HON MEMBERS: "We need to be."]—in which decisions on levels of output are a matter for the companies and not for the Government. In the second place, we are not only, or even principally, a major oil producer; we are also a major world producer and trader of many other goods and services, and a major oil consumer.
There is no overall United Kingdom national interest in keeping oil prices high. I am of course aware that a report, recently published in another place, and which attracted a certain amount of publicity at the time, predicted:
as the oil revenues diminish the country will experience adverse effects which will worsen with time"—
effects, it was said, of a most alarming nature. Had the authors of that report dreamed at the time they wrote it that half the oil revenues were about to disappear within a matter of months, their conclusions would no doubt have been even more apocalyptic. As the House knows, I have always believed their analysis, which was widely shared by Opposition Members, to be profoundly mistaken. Certainly, it will be put to the test sooner than anyone expected.
The United Kingdom is likely to remain an oil producer, of a gradually diminishing volume of oil, for the next 25 years or so. If we can survive unscathed the loss of half our North sea oil revenues in less than 25 weeks, the prospective loss of the other half over the remainder of the next 25 years should not cause us undue concern. [Laughter.]

Hon. Members: Hear, hear.

Mr. Lawson: It is, of course, true that in relative terms we do lose from the collapse of the oil price—the really big gains will be made by the major non-oil-producing countries, such as Germany and Japan, where growth will be boosted and inflation, already low, is likely to fall virtually to zero.
Inevitably, we suffer a decline, too, in the value of our net oil exports. But the oil price fall will be beneficial for the industrialised world as a whole. Even for the United Kingdom, what we gain on the swings should, over time, more than offset what we lose on the roundabouts. In particular, I expect that the levels of economic activity and inflation will, if anything, be slightly better than they would have been without the oil price collapse.
What of the balance of payments? Thanks to the abolition of exchange controls in 1979, we have been able to use a good part of our earnings from North sea oil since then to build up a massive stock of overseas assets. Our net overseas assets have, in fact, risen more than sevenfold from £12 billion at the end of 1979 to almost £90 billion at the end of last year. This is a far bigger total than that


possessed by any other major nation, with the perhaps inevitable exception of Japan. The earnings from those assets will be of increasing value to our balance of payments in the years ahead—so, too, should the improvement in our manufacturing trade balance.
Although the British economy may not gain a great deal overall as a result of the oil price collapse, there will be considerable differences within the economy. The major potential beneficiary will be the international trading sector of industry in general, and manufacturing in particular, which is already enjoying both lower oil costs and a lower exchange rate against most of its major competitors, at a time when inflation is falling.
This provides British industry with an outstanding opportunity both to increase its exports and to reduce import penetration in the home market, but it will only be able to seize that opportunity if it meets two conditions. First, it must keep firmer control of its labour costs. Secondly, it must spend more of its much healthier level of profits on investing for the future in research and development and in training. Both the opportunity, and the responsibility to see that it is not thrown away, rest fairly and squarely on the shoulders of British management. Meanwhile, despite the massive fall in oil prices, I expect the current account of the balance of payments to remain in sizeable surplus this year, by some £3½ billion.
As I have indicated, there will be pluses and minuses within the economy. If industry is the main gainer, the main loser, at least today, is the Chancellor of the Exchequer. I can live with that, but it does mean that North sea oil revenues, which are likely to amount to some £11½ billion for 1985–86, are bound to be very much less in 1986–87. Indeed, on the assumption of an average North sea oil price for the rest of this year of $15 a barrel, which is close to the average published price for the past month of around $16 a barrel, oil revenues in 1986–87 will be virtually halved, at some £6 billion. This has obvious implications for the Budget, but the important fact is that, just as we successfully weathered a year-long coal strike, so we have been able to take the unprecedented collapse in the oil price in our stride.
We have been able to do so, first, because of the underlying strength of the economy in terms of growth, inflation and the external account; and, secondly, by virtue of the reputation we have earned over seven years for sound and prudent financial management.

MONETARY POLICY

The framework within which that sound and prudent financial management has been pursued, and will continue to be pursued, is the Government's medium-term financial strategy. It provides as firm a guarantee against inadequate money demand as it does against excessive money demand. At the heart of the MTFS lies the objective of steadily reducing the growth of total spending power in the economy, as measured by GDP in cash terms, at a pace that will gradually squeeze inflation out of the system while at the same time leaving adequate room for sustained growth in real output—

Mr. Jack Straw: What about money supply?

Mr. Lawson: —and that we have done.
Over the past six years the rate of growth of money GDP has been halved, and a further significant reduction

is envisaged for 1986–87. This has brought about a combination of low inflation and steady growth. We shall continue to maintain steady downward pressure on inflation. That means, above all, controlling the growth of money in the economy.
Last year I set target ranges of 3 to 7 per cent. for narrow money, MO, and 5 to 9 per cent. for broad money, sterling M3. During 1985–86, the targeted measure of narrow money has grown towards the bottom end of its range. The target range for next year will be 2 to 6 per cent. as foreshadowed in last year's MTFS.
For broad money it has been clear since the autumn that the range was set too low. Throughout the 1980s—and in sharp contrast to the 1970s—broad money has grown far faster than money GDP. Experience has demonstrated that this has not posed a threat to inflation. This rapid growth largely reflects the increased attractions of holding interest-bearing deposits, at a time both of low inflation and high real interest rates, and of innovation and liberalisation in the financial system. Accordingly, I am setting next year's target range for broad money well above that indicated in last year's MTFS, at 11–15 per cent. Given the experience of the past six years, I believe this is not only a more realistic range, but one which is wholly consistent with the further decline in inflation which I intend to achieve.
Short-term interest rates are the essential instrument of monetary policy. Changes in interest rates have a reasonably quick and direct effect on narrow money, as they do on the exchange rate. Their effect on braod money is more complex and much more delayed. As explained in the Red Book, there is thus an important difference in the operational significance of the targets for narrow and broad money. Needless to say, I shall continue to monitor the evidence of other financial indicators, of which the most important is the exchange rate. I will say no more about monetary policy—[HON. MEMBERS: "Hear, hear."]—except to repeat what I said at the Mansion house last Autumn: that while financial liberalisation and innovation have inevitably made the process of monetary management more complicated, there has been no change whatever in the essence of policy. The Government continue to attach the highest priority to sound money.

PUBLIC SECTOR BORROWING

Though there is nothing sacrosanct about the precise mix, monetary policy must always be supported by an appropriate fiscal policy. That means, in plain English, keeping borrowing low.
The outturn for the public sector borrowing requirement in 1984–85, which had to bear the bulk of the cost of resisting the coal strike, was £10 billion, or just over 3 per cent. of GDP. In my Budget last year I planned to reduce it substantially in 1985–86, to £7 billion, or 2 per cent. of GDP. In the event, despite the loss of £2 billion of north sea oil revenue, this year's PBSR looks like turning out at a little under £7 billion, given that the total for the first 11 months of this year comes to under £3 billion.
This successful outcome, which represents the most substantial reduction in the PSBR as a proportion of GDP since 1981–82, is attributable to two factors. First, public expenditure has been kept under firm control. Not only is the outturn likely to be within the planning total, but spending in 1985–86 is expected to be below the previous year's level in real terms, even after allowing for the


effects of the coal strike. The second factor behind the successful PSBR outturn for 1985–86 is that the £2 billion shortfall in oil revenues has been offset by the increased buoyancy of non-oil revenues, reflecting a healthy economy and an increasingly profitable corporate sector.
Last year's MTFS indicated a PSBR for 1986–87 of £7½ billion, or 2 per cent. of GDP. Some would argue that, in the light of the £2½ billion increase in projected privatisation proceeds, I ought to aim well below that. Others on the other hand would claim that, since the sharp drop envisaged in oil revenues is more than double the rise in privatisation proceeds, a higher figure would be appropriate.
As last year, my judgment is that the wisest course is to stick broadly to our pre-announced figure, but, given the uncertainties over the oil price, I have decided, within that framework, to err on the side of caution, and provide for a PSBR of £7 billion, or 1¾ per cent. of GDP.
Needless to say, that does not enable me to reduce taxation by anything like the £3½ billion foreshadowed in last year's MTFS. Indeed, given the assumed loss of £5½ billion of oil revenues in 1986–87, compared with what was envisaged a year ago, I would have expected to have had to increase taxes in this year's Budget. However, not only have the tax revenues this year from the 95 per cent. of the economy that is not oil proved to be notably buoyant, but there is every sign that this will continue into 1986–87, assisted by a rather higher rate of economic growth than was foreseen in last year's MTFS.
The continued vigour of the non-North sea economy, which is likely to add well over £3 billion to expected non-North sea tax revenues, coupled with public spending which remains under firm control, has transformed what might otherwise have been a bleak prospect. As a result, I am able this year to accommodate a relatively modest net reduction in the real burden of taxation, of a shade under £1 billion. It may well be that the oil price turns out to be different from the average of $15 a barrel, which I have assumed for this year's Budget, but if any departure is purely short term, it is most unlikely to have any significance for policy.

HELP FOR THE UNEMPLOYED

I turn now to the continuing problem of high unemployment. It is a problem that can be solved—and there is no secret about how. The solution to the problem of unemployment—it is the only solution—requires progress on two key fronts. The first is a sustained improvement in the performance of business and industry, and thus of the economy as a whole. That is what every aspect of the Government's economic policy has been designed to assist, and it is already achieving impressive results. The second is a level of pay which enables workers to be priced into jobs instead of pricing them out of jobs, and which in particular ensures that British industry can hold its own against our major international competitors.
It is here that Britain's weakness lies. The plain fact is that labour costs per unit of output in British business and industry continue to rise faster than is consistent with low unemployment and faster than our principal competitors overseas. Productivity is, certainly rising quite rapidly, but pay is rising faster still.
It is this—and not our alleged dependence on oil—that constitutes the Achilles' heel of the British economy.

In a free economy—as the CBI has frankly and commendably acknowledged—it is the responsibility of employers and management to control industry's cost structure in general and its wage costs in particular. In the new and improved climate of industrial relations, and with inflation falling and set to fall further, there can be no excuse for failure to discharge that responsibility. I have, however, considered whether there is anything further Government can do to assist this over the longer term.
The problem we face in this country is not just the level of pay in relation to productivity, but also the rigidity of the pay system. If the only element of flexibility is in the numbers of people employed, then redundancies are inevitably more likely to occur. One way out of this might be to move to a system in which a significant proportion of an employee's remuneration depends directly on the company's profitability per person employed. This would not only give the work force a more direct personal interest in their company's success, as existing employee share schemes do; it would also mean that, when business is slack, companies would be under less pressure to lay men off; and by the same token they would, in general, be keener to take them on.
This would clearly be in industry's own interest, and most emphatically in the best interests of the unemployed. It should therefore occur without any prompting from Government. But there is considerable inertia to overcome, so it might make sense to offer some temporary measure of tax relief to the employees concerned to help get profit-sharing agreements of the right kind off the ground, and to secure the benefits that would undoubtedly accrue if they really caught on.
Inevitably, the design of such a relief, and the precise definition of qualifying agreements, would need to be drawn with considerable care. The Government therefore propose to discuss with employers and others to see if a workable scheme can be defined which offers the prospect of a worthwhile and broadly based take-up. If these preliminary discussions were sufficiently encouraging, we would prepare a consultative document setting out a detailed scheme for wider consideration.
Meanwhile, there is more we can do of an immediate nature to help the unemployed. In my Budget last year I announced the Government's intention to launch a new two-year youth training scheme, leading to recognised vocational qualifications. The new and expanded YTS will duly come into operation next month. It will be a giant step towards our objective of ensuring that no youngster under the age of 18 need be unemployed.
I also announced in last year's Budget a substantial expansion of the community programme to help the long-term unemployed—those who have been out of work for over a year, or, in the case of those between 18 and 24, for more than six months. The community programme, which offers work for up to a year on projects of benefit to the community, is currently providing almost 200,000 places. I have agreed with my right hon. and noble Friend the Secretary of State for Employment to provide the funds to raise the eventual target for this year to 255,000 places—very nearly double the number that existed a year ago..

Mr. John Prescott: You used to say these were not real jobs.

Mr. Lawson: At the same time, the average wage limit for the community programme will be increased to £67 a week from next month.
Last November, my right hon. and noble Friend announced two pilot schemes to provide further help for the long-term unemployed. These new initiative, which began in January, are a counselling scheme open to all the long-term unemployed in the pilot areas, and a jobstart allowance of £20 a week for six months for those long-term unemployed who take a job at less than £80 a week.

Mr. Prescott: Tea and sympathy.

Mr. Lawson: These pilot schemes are already producing results, and I have accordingly decided to provide the funds to develop them into a single programme covering the entire country. This means that every single one of the long-term unemployed throughout the land will be offered individual help and advice in finding a job.

Mr. Prescott: But no job.

Mr. Lawson: I shall also be providing the resources to launch a brand new scheme—the new workers scheme—to help 18 to 20-year-olds to find a job. This will provide for a payment of £15 a week for a year to any employer taking on an 18 or 19-year-old at up to £55 a week or a 20-year-old at up to £65 a week. The new workers scheme should provide a worthwhile incentive for employers to create jobs for young people.
Finally, I have agreed to a substantial enlargement of the proven and highly successful enterprise allowance scheme—[HON. MEMBERS: "Hear, hear."]—which makes payments of £40 a week for up to a year to assist unemployed men and women to set up in business on their own account. Funds will be provided that will enable the annual rate of entry to the enterprise allowance scheme to be increased steadily from its present figure of 65,000 to 100,000 by April 1987, and to provide more training for those involved. At the same time I propose to improve the tax treatment of payments made under this scheme.
The total public expenditure cost of the measures I have outlined, together with consequential spending in Northern Ireland, comes to £195 million in 1986–87 and £285 million in 1987–88. These gross costs will, however, be partly offset by savings on social security benefits, leaving a net public expenditure cost of £100 million in 1986–87 and £165 million in 1987–88. This will be financed from the reserve, and there will therefore be no overall addition to planned public spending.

BUSINESS AND ENTERPRISE

I now turn to the taxation of business and enterprise. [HON. MEMBERS: "Is that all about jobs?"] Hon. Members opposite would do well to listen. [HON. MEMBERS: "Hear, hear."] While the measures I have just announced help the unemployed directly, in the long run what really matters is the creation of a climate in which business and industry flourish. For it is companies, not Governments, which create jobs. The reformed system of business taxation which I introduced in my 1984 Budget has reached the end of its transitional phase and comes fully into force next month. From then on the United Kingdom will have, at 35 per cent., the lowest rate of corporation tax of any major industrial nation.
This year I have only two further amendments to make. First, I propose to ensure a full measure of depreciation for

tax purposes for short-life agricultural buildings and works, by giving the taxpayer the option of making balancing adjustments on the sale or destruction of such buildings. Secondly, I propose to reform the mines and oil wells allowances broadly along the lines of the proposals published in last July's consultative document. The overall net benefit of this to the industries concerned will amount to £45 million in 1987–88. Otherwise I propose only minor technical changes to the taxation of North sea oil; but I am continuing to keep the economics of incremental investment under review, and shall not hesitate to introduce at the earliest opportunity any changes which may prove necessary to ensure that worthwhile projects are not frustrated by the fiscal regime.
I need to set the 1987–88 car and fuel benefit scale charges for those with company cars. At the same time, the motor industry has represented to me that the discrepancy between the engine size break points in these scales and the break points in the new European Community directive on car exhaust emissions is potentially damaging to its international competitiveness. Accordingly, I propose, from April 1987, to change our break points to those in the new directive.
At the same time, as last year, I propose to increase the restructured car benefit scale charges by 10 per cent. This will still leave the scale charges well short of the true value of the benefit. The fuel scale will also be restructured, but there will be no general increase in the charges; and as from April 1987 the same scale will also be used to assess the VAT due on petrol used by registered traders and their employees. This will be simpler and more equitable than the present system, and will also bring in an extra £40 million of revenue in 1987–88.
I propose to increase the VAT threshold to £20,500, in line with the maximum permitted under existing European Community law.
I also propose to correct an anomaly in the taxation of international entertainers and sportsmen. When British entertainers or sportsmen work overseas, the foreign tax authorities normally levy a withholding tax on their earnings, but at the present time we levy no such tax on the earnings of foreign entertainers and sportsmen when they work in the United Kingdom. I believe that in future we should fall into line with most of the rest of the world. Accordingly, I propose to withhold tax at the basic rate on the earnings of overseas entertainers and sportsmen in the United Kingdom. This should yield £75 million in 1987–88.
A key element in the Government's strategy for jobs is the encouragement of new businesses. As the House knows, I have been reviewing the future of the business expansion scheme, which is due to come to an end in April 1987. I have been assisted in this review by the independent report commissioned by the Inland Revenue from the consultants Peat Marwick which is being published in full today. I am placing a copy in the Library of the House.
It is quite clear—this is confirmed by the evidence in the Peat Marwick report—that the business expansion scheme, which my predecessor introduced in 1983 as an improvement on the 1981 business start-up scheme, has been an outstanding success. It has fully achieved its aim of attracting new equity capital into unquoted companies. The amount subscribed has been running at well over £ 100 million a year, and steadily rising; and a high proportion


of this has gone into new and small businesses. Roughly half the companies involved raised sums of less than £50,000 each.

Mr. Straw: How many in manufacturing?

Mr. Lawson: I therefore have no hesitation in proposing to extend the life of the business expansion scheme indefinitely. But at the same time, despite the exclusions of farmland and property development in my two previous Budgets, I am still concerned that too much BES money is being diverted from the high-risk areas for which the scheme was always intended into areas where the risk is very much less. Accordingly, I propose from now on to exclude from the scheme all companies holding more than half their net assets in the form of land and buildings. I also propose to exclude companies whose main purpose is to invest in objects, such as fine wines, whose value may be expected to rise over time. [Interruption.]
At the same time, I have one new inclusion to announce. I have decided to bring within the scope of the BES companies engaged in the chartering of United Kingdom-registered ships. This will provide new opportunities for investment in shipping engaged in the coastal, short sea and offshore trades. I propose to take power to make further changes in the ambit of the scheme by order.
Finally, having taken steps to target the business expansion scheme more carefully, I propose to improve it. BES shares issues after today will be entirely free of capital gains tax on their first sale. [HON. MEMBERS: "Why?"] As a further measure of help for small and new businesses, the loan guarantee scheme, under which the Government guarantee 70 per cent. of qualifying bank loans, will also be extended, in this case for a further three years. The House will be glad to learn that the premium will be halved, from 5 per cent. to 21½ per cent.
My last proposal in this section concerns capital transfer tax which, ever since its introduction by the Labour Government in 1974, has been a thorn in the side of those owning and running family businesses, and as such has had a damaging effect on risk taking and enterprise within a particularly important sector of the economy. In addition to statutory indexation of the threshold and rate bands, I propose this year to reform the tax radically.
In essence, the capital transfer tax is two taxes, as its two separate scales imply: an inheritance tax and a lifetime gifts tax. We have had an inheritance tax in some shape or form ever since Sir William Harcourt introduced his estate duty in 1894. But the lifetime gifts tax which the Labour Government introduced in 1974, in the teeth of united Conservative opposition, is an unwelcome and unwarranted impost. By deterring lifetime giving, it has had the effect of locking in assets, particularly the ownership of family businesses, often to the detriment of the businesses concerned.
Accordingly, I propose to abolish entirely the tax on lifetime gifts to individuals. As with the old estate duty, there will be a tapered charge on gifts made within seven years of death and provisions to charge gifts made with reservation; and the regime for trusts, which is needed as a protection for the death charge, will be kept broadly

unchanged. The cost of abolishing the tax on lifetime giving will be £35 million in 1986–87 and £55 million in 1987–88.
In recognition of the radically changed nature of the tax, I have decided to rename it the inheritance tax. My two previous Budgets abolished three unnecessary taxes: the national insurance surcharge, the investment income surcharge and development land tax. The abolition of the tax on lifetime gifts adds a fourth.

SAVINGS AND INVESTMENT

I now turn to the taxation of savings and investment. In my 1984 Budget, I introduced a major reform of the taxation of savings and investment, designed to improve the direction and quality of both. Today I propose to carry this reform further forward. The Social Security Bill now before Parliament proposes important and far-reaching changes in pension provision, notably by encouraging the growth of personal pensions. Those changes—to which the Government attach the highest importance—have been warmly welcomed, both for the greater freedom they will give to existing pension scheme members and for the new scope they will offer to the millions of working people who are not in an occupational pension scheme.
In the light of these changes, I intend later this year to publish detailed proposals designed to give personal pensions the same favourable tax treatment as is currently enjoyed by retirement annuities. Publication of these proposals will enable there to be the widest possible consultation prior to legislation in next year's Finance Bill. Meanwhile, I can assure the House that, as I made clear last year, I have no plans to change that favourable tax treatment.
However, I do need to deal with the growing problem of the rules governing pension fund surpluses. The dramatic improvement in the financial climate compared with a decade ago, most notably as a result of the sharp fall in inflation, has seen a number of pension funds become heavily over-funded. This presents a double problem, both aspects of which the Inland Revenue is at present having to deal with through the exercise of its discretionary powers.
In the first place, excessive surpluses, even if they arise unintentionally, represent the misuse of a tax privilege which was intended to assist the provision of pensions, and for no other purpose. So the Inland Revenue requires from time to time that surpluses be diminished. However, at the same time, the Inland Revenue feels obliged to turn down many of the increasing number of requests from companies which, often for good reasons, wish to take refunds from their pension fund into the company itself.
The absence of clear rules on how surpluses should and may be dealt with, and the consequent reliance that has to be placed on the exercise by the Inland Revenue of its discretion, have created considerable uncertainty and have unnecessarily constrained trustees' freedom of action. Therefore, I propose to replace these discretionary arrangements with clear and objective statutory provisions.
In future, the amount of any surplus in a fund will be determined for tax purposes in accordance with published guidelines, based on a secure funding method and prudent actuarial assumptions, as advised by the Government Actuary. Where a surplus is 5 per cent. or less of total


liabilities, no action will need to be taken. Where it is higher than that, action will be required to eliminate the excess.
It will be entirely a matter for the trustees and employers to decide whether the reduction is to be achieved by increasing benefits, or by reducing contributions, or by making a refund to the company. If, and only if, they choose to make a refund, the employer will be liable to tax at a rate of 40 per cent. of the amount refunded, so as broadly to recover the tax relief previously given. The effect of these new arrangements is likely to be a yield of £20 million in 1986–87 and £120 million in 1987–88.
Next, stamp duty. I have no change to propose in the stamp duty on houses and other property, which I reduced to 1 per cent. with a higher threshold in my 1984 Budget, but there is a formidable case this year for a further reduction in the rate of stamp duty on share transfers. The City of London is the pre-eminent financial centre of Europe. The massive £6 billion it contributes to our invisible earnings is but one measure of the resulting benefit to the British economy.
Competition in financial services nowadays is not continental, but global. The City revolution now under way, due to culminate in the ending of fixed commissions, the so-called big bang, on 27 October, is essential if London is to compete successfully against New York and Tokyo. If London cannot win a major share of the global securities market, its present world pre-eminence in other financial services will be threatened. Successful competition depends on a number of factors, but one of the most important is the level of dealing costs. The abolition of fixed commissions will certainly help, but with no tax at all on share transactions in New York, and roughly ½ per cent. in Tokyo, under the existing tax regime London will still be vulnerable.
I therefore propose to reduce stamp duty on share transactions from 1 per cent. to ½ per cent. as from the date of the big bang. It is right that the full cost of this should be met from within the financial sector itself and accordingly, I propose to bring into tax at the new ½ per cent. rate a range of financial transactions which are at present entirely free of stamp duty. These include transactions in loan stock other than short bonds and gilt-edged securities, transactions unwound within a single stock exchange account, letters of allotment, the purchase by a company of its own shares, and takeovers and mergers. There will also be a special rate of 5 per cent. on the conversion of United Kingdom shares into ADRs and other forms of depositary receipt. Some of these changes, including the new ADR charge, will take effect immediately: others will be delayed until the big bang.
This further halving of the stamp duty on equities should enable London to compete successfully in the worldwide securities market, and it will also provide a further fillip to wider share ownership in the United Kingdom. Just as we have made Britain a nation of home owners so it is the long-term ambition of this Government to make the British people a nation of share owners, too; to create a popular capitalism in which more and more men and women have a direct personal stake in British business and industry. Through the rapid growth of employee share schemes, and through the outstandingly successful privatisation programme, much progress has been made—but not enough. Nor, I fear, will we ever achieve our

goal as long as the tax system continues to discriminate so heavily in favour of institutional investment rather than direct share ownership.
Accordingly, I propose to introduce a radical new scheme to encourage direct investment in United Kingdom equities. Starting next January, any adult will be able to invest up to £200 a month, or £2,400 a year, in shares. These will be held in a special account which I am calling a personal equity plan. As long as the investment is kept in the plan for a relatively short minimum period of between one and two years, all reinvested dividends and all capital gains on disposals will be entirely free of tax. The longer the investment is kept in the plan, the more the tax relief will build up and the greater will be the benefits, and there will normally be no need for Inland Revenue to get involved at all.
Although the scheme will be open to everyone, it is specially designed to encourage smaller savers, and particularly those who may never previously have invested in equities in their lives. The plans will be simple and flexible to operate. Anyone who is legally able to deal in securities will be eligible to register as a plan manager, but the investor himself will own the shares and the rights that go with them, including voting rights. It will be for the investor to choose whether to make the investment decisions himself or to give the plan manager authority to act on his behalf. The cost of the scheme will be around £25 million in 1987–88, but will build up in later years as more plans are taken out.
This is a substantial, innovative and exciting new scheme. I am confident that, over time, it will bring about a dramatic extension of share ownership in Britain. Although wholly different in structure from the Loi Monory in France, I expect it to be every bit as successful in achieving its objective. I am sure the whole House will welcome this far-reaching package of measures to reform the taxation of savings and investment.

CHARITIES

I turn now to the tax treatment of charities and charitable giving. In almost every facet of the nation's affairs, it becomes increasingly clear that private action is more effective than state action. This is particularly well illustrated by the success of charitable organisations up and down the land in the fields of famine relief, social welfare, medicine, education, including the universities, the arts and the heritage.
The Government have already done a great deal to assist charities, both through the tax system and in other ways, but the time has come to take a further step forward. The first question is whether any further fiscal relief should be given to the charities themselves, through relief from VAT, or to the act of giving.
In the light of representations from the Charities VAT Reform Group, I am prepared this year, exceptionally, to make a number of specific concessions on the VAT front. I propose to relieve charities from VAT on their non-classified press advertising:, on medicinal products where they are engaged in the treatment or care of people or animals, or in medical research; on lifts and distress alarm systems for the handicapped—[HON. MEMBERS: "Hear, hear."]—on refrigeration and video equipment for use in medical applications purchased by charities from donated funds; on all recording equipment for talking books and


newspapers used by charities for the blind; and on welfare vehicles used by charities to transport the deaf, blind or mentally handicapped.
But in general, I am convinced that the right way to help charities is not by relieving the charities themselves from VAT, but by encouraging the act of charitable giving. I say this for two principal reasons. First, it is clearly better that the amount of tax relief is related to the amount of support a charity is able to attract, rather than to the value of goods and services it happens to purchase. Secondly, whereas a pound of VAT relief is worth precisely that, a pound of tax relief on giving is likely to generate more than a pound of income going to charity.
My principal proposals therefore relate directly to the act of giving to charity. First, I propose to abolish altogether the upper limit on relief at the higher rates of income tax on charitable covenants. At the same time, I propose to act to stop the abuse of the tax system by ensuring that tax relief goes only to money which is used for charitable purposes.
Next companies. It is widely believed that corporate giving to charity would be more generous than it is at present if tax relief did not depend on the company entering into a four-year covenant. Accordingly, I propose to allow public companies to enjoy tax relief on one-off gifts to charity up to a maximum of 3 per cent. of the company's annual dividend payment to its shareholders. There will, of course, continue to be no limit on the amount a company can covenant to charity.
Many charities, however, have made clear to me their fear that to introduce a similar relief for one-off donations by individuals would weaken them by reducing the stability they enjoy as a result of the binding force of covenants. Instead, therefore, I propose to encourage individual giving to charity by a different means, that of tax relief for payroll giving. From April 1987 it will be open to any employer to set up a scheme under which employees can have charitable donations of up to £100 a year deducted from their pay, and get tax relief on them.
All in all, the proposals I have announced today add up to a very substantial package of assistance to charities and charitable giving. Their cost to the Exchequer will depend on how generously companies and employees respond to this initiative, but my best estimate is that it could amount to as much as £70 million in 1987–88. This will be partly paid for by the measures to curb abuse, which may save some £20 million a year. I hope that the additional charitable giving these concessions stimulate will be at least twice the amount of the extra tax relief given.

TAXES ON SPENDING

I now turn to the taxation of spending. So far as the indirect taxes are concerned, the overriding question this year is how far I should recover from the oil consumer the tax revenues I have lost from the oil producer, as a result of the massive fall in the oil price. Since November the price of petrol at the pump has fallen by anything up to 15p a gallon, but if the oil companies had passed on the full amount of the fall in the oil price to date, the price of petrol at the pump could have been 12p a gallon lower still. There is clearly scope, therefore, for a sizeable increase in petrol tax this year.
I have concluded, however, that at the present time, while I must certainly maintain the real value of the

revenue I get from the motorist, I will not increase it. But I do believe it makes sense to look again, in the light of the radically changed circumstances, at the relative weight of petrol tax and vehicle excise duty. Accordingly, I propose to increase the duty on petrol by an amount which, including VAT, would—if it were wholly passed on to the consumer—[HON. MEMBERS: "And it will be"]—raise the price at the pump by 7½p a gallon. [Laughter.] This is 2p more than is needed to keep pace with inflation, and that 2p enables me to keep vehicle excise duty at last year's level of £100 for cars and light vans, leaving the overall burden on the motorist unchanged in real terms. [HON. MEMBERS: "Hear, hear."] Moreover, given the very substantial increase in the oil companies' margins, there is clearly no need for the pump price of petrol to go up at all. Indeed, it ought to fall further. In the same way, I propose to increase the duty on derv by an amount which—if it were wholly passed on to the consumer, which, to repeat, it should certainly not be—would raise the price at the pump by 6½p, including VAT. This will enable me to avoid any general increase this year in the vehicle excise duty on lorries, too.
So far as the other oil duties are concerned, I have one or two changes to make—not to the duty on heavy fuel oil, which will remain unchanged as it has done since 1980, but I propose to increase the very modest duty on gasoil, by 1½p a gallon, and I propose to abolish altogether the duties on aviation kerosene, or Avtur—which at present is taxed for domestic flights only—and on most lubricating oils. All these changes in duty will take effect from 6 o'clock this evening.
Finally, so far as oil products are concerned, I am anxious to do what I reasonably can to assist the introduction of lead-free petrol. The case for this on environmental grounds is clear. I have therefore decided to create a duty differential in its favour to offset its higher production costs. My officials will be discussing with the oil companies how this can best be achieved in time for next year's Budget.
Next, tobacco. In the light of the representations that I have received on health grounds, I have decided to increase the duty on cigarettes by appreciably more than is needed to keep pace with inflation. I therefore propose an increase in the duty on cigarettes and hand-rolling tobacco by the equivalent, including VAT, of approximately 11p on a packet of 20 cigarettes. This will take effect from midnight on Thursday. As last year, I propose no increase at all on the duties on cigars and pipe tobacco, which are more heavily taxed here than in most comparable countries.

Mr. Anthony Beaumont-Dark: Absolutely right.

Mr. Lawson: Next, drink. As the House will recall, I was obliged in 1984 to increase the duty on beer by slightly more than I would have wished, as a consequence of the judgment against the United Kingdom in the European Court. I now propose no increase at all in the duty on beer. [HON. MEMBERS: "Hear, hear,"] Nor do I propose any increase in the duties on cider, table wine, sparkling wine, fortified wine or spirits. This last decision will, I hope, be particularly welcome in Scotland.
Finally, VAT, I propose to stop the misuse of long-stay relief for hotel accommodation, and make certain other minor changes, but I have no proposals for major changes in value added tax this year.
The changes I have announced in the excise duties will, all told, raise an extra £795 million in 1986–87, the same amount as I would have raised had I simply increased all the excise duties precisely in line with inflation. The overall impact effect on the RPI, if all the increases were fully passed on, would be one half of one per cent. This has already been taken into account in the forecast I have given the House of 3½ per cent. inflation by the end of the year.

INCOME TAX

Finally, I turn to income tax. In my Budget speech last year I undertook to issue a Green Paper on the reform of personal taxation. As the House is aware, I am publishing the Green Paper today. It discusses a range of options which will in due course be opened up by the computerisation of PAYE, from the relationship between income tax and employees' national insurance contributions to the closer integration of the tax and benefit systems.
In particular, however, it outlines a possible reform of the present system of personal allowances. The responses to my predecessor's 1980 Green Paper revealed widespread dissatisfaction with the existing arrangements, but—perhaps inevitably—no clear consensus as to what should replace them.
Married women increasingly resent the fact that a wife's income is treated for tax purposes as that of her husband, depriving her of the independence and privacy she has a right to expect. There is growing complaint, too, of the way in which, in a number of respects, the present system penalises marriage itself, and it cannot be right that the tax system should come down hardest on a married couple just at the time when the wife stops work to start a family. Yet that is what happens today.
The alternative system set out in the Green paper, of independent taxation with allowances tranferable between husband and wife, would remedy all these defects. To be acceptable, however, it would need to be accompanied by a substantial increase in the basic tax threshold.
The Government are committed to reducing the burden of income tax, and the proposal in the Green Paper suggests one way of doing that which would achieve a number of other worthwhile objectives—including the ability to take more people out of the unemployment and poverty traps for a given amount of tax relief than is possible under the present tax system. Given the timetable of computerisation, none of this could in practice be implemented until the 1990s, but we need to start planning for the 1990s today. The Government will therefore carefully consider the responses to today's Green Paper before taking any decision on how to proceed.
Meanwhile, I have to set the tax rates and thresholds for the coming year, but first I have two minor proposals to announce, both of which I hope the House will welcome. First, pensions paid by the German and Austrian Governments to victims of Nazi persecution are free of tax in both Germany and Austria. In this country, however, the tax relief on such pensions is set at 50 per cent. In future, I propose that pensions paid to victims of Nazi persecution should be free of tax altogether.
Secondly, the House will be aware that, as from next year, social security benefit upratings will be moved to April, to coincide with the tax year. This will enable them to be fully taken into account before PAYE codes are

issued for 1987–88. However, to bridge the gap between the November 1985 and April 1987 upratings, my right hon. Friend the Secretary of State for Social Services proposes to have a special transitional uprating in July, the details of which he has recently announced. But, as hon. Members will know from their postbags, it could be confusing for many old-age pensioners and widows to undergo a special mid-year tax recoding on account of the July uprating. I have therefore decided that for pensioners and widows the benefit increases payable in July will be exempt from income tax in 1986–87. The cost of this will be £15 million.
Since we first took office in 1979 we have cut the basic rate of income tax from 33 per cent. to 30 per cent. and sharply reduced the penal higher rates we inherited from Labour. We have increased the main tax thresholds by some 20 pr cent. more than inflation—and the greater part of that 20 per cent. has been achieved during the present Parliament.
It is a good record, but it is not good enough. The burden of income tax is still too great. Nothing could be further from the truth than the claim that we have a choice between cutting tax and cutting unemployment, for the two go hand in hand. It is no accident that the two most successful economies in the world, both overall and specifically in terms of job creation—those of the United States and Japan—have the lowest level of tax as a proportion of GDP. Reductions in taxation motivate new businesses and improve incentives at work. They are a principal engine of the enterprise culture, on which our future prosperity and employment opportunities depend.
The case for higher tax thresholds is well understood. In my two previous Budgets I have raised the married man's allowance to its highest level in real terms since the war, higher as a proportion of average earnings than in either Germany or the United States. But we should not overlook the need for reductions in the basic rate of tax too. The basic rate is the starting rate of tax and it is the crucially important marginal rate of tax for some 95 per cent. of all employees and 90 per cent. of all self-employed and unincorporated businesses.
Clearly, given the massive fall in oil revenues, this is not a year for substantial reductions in tax of any kind, but, provided the economy continues to grow as it has been growing, and provided we continue to maintain firm control of public expenditure, the scope should be there in the years ahead.
Meanwhile I propose for 1986–87 to raise all the main thresholds and allowances by the statutory indexation figure of 5·7 per cent. rounded up. The single person's allowance will therefore rise by £130 to £2,335 and the married man's allowance by £200 to £3,655. Similarly, the single age allowance will rise by £160 to £2,850 and the married age allowance by £250 to £4,505. The age allowance income limit becomes £9,400. I propose to raise all the higher-rate thresholds by exactly £1,000. This is fully in line with statutory indexation for the first—40 per cent.—higher rate, but less than half statutory indexation for the top—60 per cent.—rate.
Given the need for caution in the light of current circumstances, I do not have scope this year for a reduction in the basic rate of income tax beyond one penny in the pound. But this reduction from 30 per cent. to 29 per cent. still represents the first cut in the basic rate of income tax


since my predecessor took it down from 33 per cent. to 30 per cent. in 1979. So long as this Government remain in office, it will not be the last.
There will, of course, be a consequential reduction in the rate of advance corporation tax, and I also propose a corresponding cut in the small companies' rate of corporation tax from 30 per cent. to 29 per cent.
The combined effect of the various income tax changes I have just announced is to concentrate the benefit, modest as I readily concede it to be, not on the rich but on the great majority of ordinary taxpayers. As a result of the adjustments I have made to the higher-rate thresholds, the gain for those at the top of the income scale is more or less confined to what they would have received under simple indexation alone. By contrast, the married man on average earnings will be some £2·60 a week better off, an improvement of £1·45 a week over simple indexation alone.
The income tax changes I have announced today will take effect under PAYE on the first pay day after 17 May. They will cost £935 million in 1986–87 over and above the cost of statutory indexation.
Seven years ago, when my predecessor cut the basic rate of income tax from 33 per cent. to 30 per cent. he added:
Our long-term aim should surely be to reduce the basic rate of income tax to no more than 25 per cent." [Official Report, 12 June 1979; Vol. 968, c. 261.]
I share that aim.

CONCLUSION

In this Budget, Mr. Deputy Speaker, I have reaffirmed the prudent policies that have brought us three successive years of steady growth with low inflation and the prospect of a fourth ahead of us. I have described how we can take in our stride the dramatic collapse in the oil price, and benefit from its consequences.
In collaboration with my right hon. and noble Friend the Secretary of State for Employment, I have announced a further substantial range of measures to help the unemployed. I have proposed a radical and far-reaching new scheme for tax-free investment in equities. so that we may truly become a share-owning democracy, and I have abolished a fourth tax. I have announced the most substantial package of assistance to charitable giving ever, and cut the basic rate of income tax.
Building as it does on the achievements of the recent past, this Budget is a safeguard for the present and a springboard for the future. I commend it to the House.

PROVISIONAL COLLECTION OF TAXES

Motion made, and Question,

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following Motions:—

(a) Tobacco products (Motion No. 2);
(b) Hydrocarbon oil (Motion No. 3);
(c) Vehicles excise duty (hackney carriages and farmers' goods vehicles) (Motion No. 4).—[Mr. Lawson.]

put forthwith, pursuant to Standing Order No. 114 (Ways and Means Motions), and agreed to.

Mr. Deputy Speaker (Mr. Harold Walker): I shall now call on the Chancellor of the Exchequer to move the motion entitled "Amendment of the Law". It is on that motion that the Budget debate will take place today and on succeeding days. The remaining motions will not be put until the end of the Budget debate next week and they will then be decided without debate.

Budget Resolutions and Economic Situation

AMENDMENT OF THE LAW

Motion made, and Question proposed,

That it is expedient to amend the law with respect to the national Debt and public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting any supply;
(b) for refunding any amount of tax;
(c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or
(d) for any relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Lawson.]

Relevant documents:European Community Document No. 9792/85, Annual Economic Report 1985–86 and the unnumbered document, Annual Economic Report 1985–86 (final version as adopted by the Council).

Mr. Neil Kinnock: I shall observe the convention with the usual relish and congratulate the Chancellor of the Exchequer on the way in which he delivered his speech. This year he did not quite break his own record of one hour and 14 minutes, but it certainly assisted us to have such a clear and crisp delivery, which took such a short time.
Congratulations are especially in order because the Budget was plainly not the Budget which the Chancellor of the Exchequer thought he could introduce this year. Indeed, it was not the Budget which he wanted to introduce this year. Last year, both at Budget time and at the Conservative party conference, he looked forward to tax cuts. It is obvious that this year's Budget was to have been a bribes Budget, which would begin to make tax cuts with the next general election in mind. Instead, the fall in oil prices and the consequent fall in oil revenues has made it into a bits and pieces Budget. It is a Budget which contains promises of there being some scope next year. It is jam tomorrow from a Chancellor of the Exchequer who is plainly in a jam today.
The Chancellor of the Exchequer will have noticed from the Opposition's response that we sincerely welcome some aspects of the Budget. I think, for example, of the provisions relating to the business expansion scheme both in its continuation and its exclusions, which appear to be sensible and helpful. In addition, the provision to relieve victims of Nazism from tax obligations on their pensions is obviously just and will command unanimous support. The concessions favouring charities are equally welcome, although I hope, as the Chancellor implied, that they will be judiciously monitored, as it would be wrong for any suspect bodies to benefit from them.
I echo, and I hope reinforce, the view expressed by the Chancellor that, as a result of his approach, we can ensure that petrol prices at least stay the same. Indeed, they should fall, given the benefits that have accrued to oil companies.
Other matters, including the Green Paper, will need close scrutiny. If the Green Paper's proposals were to result in any disadvantage to married women, or were to act as a deterrent to women considering paid work, the Chancellor could expect to meet hostility both inside and outside the House.
Naturally, other aspects of the Budget can be criticised. One which stands out is the abolition of the gift tax, which is literally a handout to the rich. Following the tradition of the House I propose to leave such detailed considerations to other hon. Members to discuss, but there is one point that I wish to make, because it represents a fundamental cause for concern.
The Budget should have been particularly distinctive, as it is the first Budget of the post-oil boom era. For that reason, it is endowed with a particular and historic importance. Although the Chancellor of the Exchequer is conscious of the loss of resources, and presumably of the impact of that on our economy, he has chosen to do nothing that will effectively promote the building and rebuilding of our manufacturing economy, and to do nothing to help systematically to provide our country with the modern means of making a living in the future. Such provision for training, research, design and development, and for new machines, should have been made in all the Budgets since 1979, and this year they should have been not an ingredient but a primary feature. After all, we find ourselves in difficult times with revenues falling.
The promotion of the redevelopment and regeneration of our economy is not central to this year's Budget, and that makes it a sideshow Budget, and an exercise in taxation juggling that is irrelevant to the main problems of employment and development which face our people and our businesses. The loss of industry during the past six and a half years, and the loss of revenue now facing us, should have made such considerations a primary concern of the Budget, together with compensation for those losses.
Such failures are not the only matters of concern or the only areas in which the Chancellor has sadly failed to make the necessary responses. We must be grateful for the fact that he did not describe his puny package as yet another "Budget for jobs". I suppose that he has learnt from his experience of last year. He then gave it that grandiose title, but the result was that in the first six months after that Budget there was a net increase in employment of 4,000 people—4,000 people in an economy with 3·4 million registered unemployed, and in a year in which total unemployment rose again by more than 70,000. Thus, we cannot be expected to cheer over the addition of 55,000 people to the community programme or over the fact that the wage has been increased by £2 to the princely sum of £67 a week.
The expansion of the job clubs for advice is more of a taunt than a support for the unemployed. The Chancellor of the Exchequer, who must be acquainted with the facts, must know that people will regard that as nothing more than an additional opportunity to have a chat and a cup of tea. In some ways, that is an advantage in itself, because unemployment can be an extremely lonely condition, but that is about as far as it goes, and the right hon. Gentleman knows that well.
During the past six and a half years, poverty has increased significantly. Double the number of families are on supplementary benefit, and an additional 2 million people are so poor that they must depend on supplementary benefit. The Budget said nothing and offered absolutely nothing to the poor. I did not expect that it would, coming from a Government who are weakening wages councils, and who during the next 12 months will make provision to ensure that the old-age pension is worth 3 per cent. less at this time next year than it is now. I could not expect a full-hearted commitment to combating poverty from such


a Chancellor. With regard to the 1p reduction in the basic rate of tax, the Chancellor has only to reduce the basic rate by a further 5p to bring taxation down to the level of the 1979 burden.
The same faint-heartedness with which the Chancellor tries to wage war on poverty characterises his approach to the City. During the past six and a half years the institutions and individuals there have benefited stupendously from a variety of Government measures, yet what is to be obtained from them? The answer is nothing more than a sum equivalent to the amount lost to the Exchequer by halving stamp duty—£200 million—at a time when they are doing more than well, and when their conditions and rewards are arousing criticism in the Conservative party and from commentators who are usually slavish in their support for the Chancellor's general strategy. The Chancellor should have taken this chance to ensure that those people on high salaries with high returns pay their way as members of our society.
In all those areas—poverty, jobs and the approach to the City and those who now enjoy positions of great wealth—the Chancellor has seen the need for action, as we know from the way in which he touched on them, but he has backed off from acting effectively. That makes it the fudge-it Budget of a Government who during the past seven years have worn away the industrial base of the nation and wasted huge sums of wealth in a rake's progress financed by oil revenues. The Government have taxed ordinary people more than any other Government in history. They have borrowed more than any other Government in history. [HON. MEMBERS: "No."] Yes. The Government have borrowed £60 billion in five years, compared with the Labour Government, of whom the Chancellor was so critical, who borrowed £40 billion.

Sir Peter Tapsell: When the right hon. Gentleman quotes those figures, will he bear in mind that this Government at least borrowed from the British, whereas the Labour Government borrowed from abroad in foreign currrencies?

Mr. Kinnock: Yes, and as Mr. Tim Congdon has reminded us, as a consequence of that borrowing the Government's repayments of interest are running at £19·5 billion, compared with the total of £8 billion which the Labour Government had to pay to an assortment of people during their last period of office. I hope that the hon. Gentleman's patriotism will extend to other areas, especially to sell-offs—the way in which the Government have been raising funds to finance their programme.
The Government have been raising funds by once-and-for-all sales of assets that have been built up for generations by British taxpayers. The sum is exhaustible, and that is a ruinous way to proceed. The Government have had the unprecedented and unrepeatable bonus of £55 billion-worth of revenues from North sea oil. No other Government have ever enjoyed such revenues, and no British Government have ever so wilfully squandered such wealth.
For years the Government have been told in Budget debates, and at many other times, by us and by others that they should use that windfall deliberately and prudently to modernise and restructure British manufacturing industry. They were provided with a glorious opportunity to do that,

sheltered as they were from balance of payments pressures, which have affected every Government in the decades before they came to office, with the asset of oil. They did not take advantage of that. Instead, they have used the resources and revenues to pay part of the bill for unemployment, to make tax concessions to the richest and to send abroad funds that have come in handy for our competitors to finance the advance of their industries. The Government have blown our oil wealth completely and have next to nothing to show for it. Indeed, in some respects they have less than nothing.
Manufacturing investment is still nearly 20 per cent. lower than it was in 1979. Manufacturing output is still lower than it was in 1979. During the Government's seven years the healthy surplus in manufactured trade which they inherited has been turned to a deficit of £3 billion this year, having gone into deficit for the first time in modern British history in 1983. Only the Prime Minister's dwindling palace guard believes that that gap can start to be made up by the sale of services. Certainly the British Invisible Exports Council and an assortment of others who make their living in that sphere know that the gap cannot be made up by the sale of services.
In addition to the failure to sustain manufactured output, investment and trade, we have also seen a massive loss of employment. At present 3·4 million people are registered unemployed, and more people have been unemployed for a year than the total number of unemployed when the Government took office in 1979.
These seven years have been the wasted years, the locust years, and the years which on Saturday the Prime Minister with unconscious and untypical accuracy described as the years of excavation. How right she was. During these severn years great holes have been dug which not only have undermined the structure of our society, but, even more painfully and damagingly, have undermined the self-confidence of millions of people. Now, throughout the country young men and women aged 20 to 22 ask, without the merest hint of self-pity or affectation, "Do you think I will ever get a job?"
I am sure that you, Mr. Deputy Speaker, have encountered such young people, as I have. I am sure that Tory Members have also done so. I wonder what Ministers say when they are addressed in that fashion. Do they dismiss the questioners as grumblers, as the Prime Minister did on Saturday? Do they say, as she did, "We have had only six years and nine months and we are only just beginning."? Six years and nine months ago, the previous Chancellor of the Exchequer, the right hon. and learned Member for Surrey, East (Sir G. Howe), began the Conservative party's period of office with his first Budget, which he described as the Budget for a new beginning. It is six years and nine months from beginning to beginning. That is the story of the Government, yet they continue to say that there is no alternative.
Hardly anyone believes the Government now. Conservative Members, and members of the Cabinet, do not believe that there is no alternative. Some actually want to be the alternative. The Confederation of British Industry does not believe it, the TUC does not believe it, the Select Committee of Employment of this House does not believe it, the Select Committee on Overseas Trade of the other place does not believe it.
I have a list of people who in different degrees have repeatedly endorsed the proposition that there is a serious and constructive alternative, which consists of bringing


about a major increase in spending. There is only one thing more expensive than spending, and that is not spending, paying the bills of idleness that go with that, and in particular not spending on our young people, on training, on new technology and on research. These costs will be paid generation in and generation out, apart from the costs that are run up in our society in despair, division and decay. The Prime Minister is almost alone in her belief that the difficulties besetting our society are disconnected from the economic woes inflicted upon our society. Nobody else seriously believes that.
Apart from a commitment to development, to building, to employment, and to construction, it is also obviously necessary, as it has been throughout the years of oil revenue, for money to be expended on renovating our industrial base. That suggestion has come from many quarters, as has the proposition that in both the private and public sectors of manufacturing and services, priority must be given to investment, so that the boost in employment and enterprise is not dissipated in the consumption of imports, or in handouts, which are absorbed in the short term.
There must be strategic answers to the strategic problems which beset our economy. None of those answers has been forthcoming in this Budget. Any prudent and responsible Government would have geared their monetary and fiscal policy to the development of the manufacturing base as an essential bedrock of their economic policy, and a resource for future growth and our standard of living. They would be fighting unemployment as an economic and social evil, instead of using unemployment as an economic and social weapon.
This Government are neither prudent nor responsible. They are prodigal in their waste of resources, and reckless in their attitude to the future of our country. Yet again, this Budget shows that they will not change any of their wasteful ways. This time, that failure to change is even worse. They have been given a clear warning of what life will be like without oil revenues. They have failed to make any effective or constructive response to the reality that faces them and everybody else. That is the dereliction of duty, and that is running away from the problem, and we shall punish that desertion of duty by defeating them at the next general election.

Sir Kenneth Lewis: I have seen a lot of Budgets in the time I have been in this House. I suppose they have been in various categories. Of some Budgets we expect much and get little. With some we anticipate the worst, and get it. In other Budgets, in not expecting much, we are then surprised by the result. This Budget is surprising in its variety, and surprising because almost everything predicted has not been done, and things that we did not expect have happened. I thought the Chancellor put the Budget in its correct context when he said that it was one of swings and roundabouts.
The Budget has done a number of things which must please many people outside of this House, and certainly pleases hon. Members on the Government side of the House, even if it does not please some on the other side. I always feel rather sorry that the Leader of the Opposition has to come straight in with an instant judgment, and answer a Chancellor who has been thoroughly briefed

before he rises to speak. I thought that the Leader of the Opposition today criticised across the board rather more heavily than was justified.
The story that the Chancellor had to tell at the beginning of his speech was one of success. Considering that we are losing next year £5 billion in oil revenue, I felt that the out-turn in terms of tax reduction possibility was surprisingly good.
Like many of my hon. Friends and people in the country, I believe that when we come to fight the next general election, the greatest issue will be not whether people have had reductions in tax, but whether we have reduced unemployment—I would say below 3 million. It will take quite a stimulus to reduce unemployment below that figure.
If I had one disappointment today, it was not that the Budget lacked stimulus, for the measures are there to provide such a stimulus. However, the amount of money that has been allocated to he stimulus was rather less than I would have hoped for.
My right hon. Friend would expect me to say that I was delighted that there was an increase in money given to the community programme. That is good for helping the long-term unemployed. The long-term unemployed figure is now very serious. The amount of money that is to be spent on the community programme—and other similar programmes; I think I have got the figure right from my right hon. Friend—is only £198 million.
This includes what has been provided to employers to give work to people aged between 18 and 20. This new incentive to employers is helpful to those who have been on the youth training programme. Many people justifiably ask, if the young are trained on a youth training programme, "Trained for what?" the most important factor is that when they come out of that programme that they will get jobs. This 18-to-20 proposal, to encourage employers to take on more youngsters when they come out of training, is good. The question is, is it enough?
We are told that reducing unemployment is not entirely in the hands of Government. I agree with that. Nevertheless, the Government can do a great deal, particularly on an occasion such as this, when the Chancellor is determining his financial policy for the year ahead. Here is a chance to stimulate the creation of new jobs. It is a mistake to think that Government cannot create jobs. They can help to lose jobs, although the Government are not doing that. They are trying to get industry right; they are making an effort to encourage the creating of jobs. However, if the Budget is short on anything, it is short on actually providing new employment.
Recently, I listened to my right hon. Friend the Prime Minister make the point that in the United States of America, Germany and other countries of the West with capitalist societies, unemployment had been reduced without the Government spending a great deal of money. That is to misread the situation. In America, the national budget and the states' budgets—I have figures into which I shall not go now—show that the Americans spend an enormous amount on the arms and space programmes and the individual states spend large sums on their social programmes, all of which employ many, many people.
I have not looked at the Budget figures yet, so I do not know what the contingency fund for next year is to be. I believe that in that fund there may be scope for the Government, in the next 12 months, to spend more money


on providing extra jobs. I hope that they will do that. If there is money in the contingency fund, it should be reduced to good advantage, and that means reducing the dole queues.

Mr. Nicholas Winterton: My hon. Friend is developing an interesting and positive argument. Is he aware that in the United States, where a great many new projects are Government-led, if not necessarily Government-funded, this has been done in a big way, creating millions of extra jobs, and it has been done without creating a high level of inflation, which is so damaging to the longer-term sound economy of any country?

Sir Kenneth Lewis: My hon. Friend is right to draw attention to the position in the United States, which also applies to a considerable extent in Germany.
I do not know how large the contingency fund is. I hope that it is as large as or larger than it was last year. If it is, I hope that the money that my right hon. Friend the Chancellor has in his back pocket will be well used.
There is another matter. Although it is commendable from his point of view that my right hon. Friend has been able to keep his borrowing requirement at £7 billion, the same as last year, could we not really afford to have the borrowing requirement go up by another £1 billion? It represents only a small percentage—I believe that it is now less than 2 per cent.—of our gross national product, and we could allow that to slip a bit during the next 12 months.
Although there is much to be said for a large part of the Budget, and there is much that I like about it, there is still missing that element of concentration on getting jobs. I was surprised that my right hon. Friend the Chancellor cut the standard rate of tax as against putting up thresholds to take more people out of tax. We are always saying that there should be an incentive for people to take work, but there is an adverse effect when people can pick up as much on social security and benefits as they can through earnings.
In many parts of the country there are low earnings which are not comparable to those of London and other more prosperous areas. An example is my area. When those who are on low pay see what they can get on social security, rent rebates and the like and then look at the tax deductible from possible wages, is it surprising that too many shy away from work.
I am in favour of bringing down the standard rate of income tax, if we can do both that and raise thresholds, but this year we cannot. Therefore, on balance, to give 1p off the standard rate of income tax is too expensive for what it will achieve. In two or three months' time, nobody will see any difference between paying 30p in the pound and 29p in the pound. If my right hon. Friend the Chancellor had been able to bring down the rate by 3p in the pound, that would have been a reasonable option. Clearly, he could not do that. Obviously my right hon. Friend's judgment is not mine on this matter. Next year, if he wants to make an effective reduction in the standard rate, he will have to bring it down by three points. Will he be able to afford it? This year the 1p reduction is too small to be of any relevance to any whom it affects.

Dr. Alan Glyn: My right hon. Friend raised the threshold by 5·7 per cent.

Sir Kenneth Lewis: My right hon. Friend raised the threshold by only just the rate of inflation, when he could have raised it by double the rate of inflation and not taken 1p off the standard rate. I am not making a great complaint. It was just a matter of judgment. My right hon. Friend's judgment is that it is better to reduce the standard rate, and my judgment is in a different direction.

Dr. Glyn: My hon. Friend is making a strong argument. Does he agree that if extra money was, as he suggested, used to raise thresholds, it would have a greater effect in inducing people to take jobs?

Sir Kenneth Lewis: This is the point that I have been trying to make.
Many of us, for many years, have wanted wider share ownership. I congratulate my right hon. Friend the Chancellor on creating such a scheme, and I hope that it will gather momentum over the years. We need an enlightened capitalism in which people on the shop floor have an interest not only in the company in which they work, but in others. At the moment, they all have an interest in companies through their pension funds, but they do not realise it. It is better that they should understand that having a personal stake in industry is good for industry, good for them and good for the country as a whole.
The Budget has potential. I know that in the past few years we have not had a second Budget, but in the time that I have been in the House, Chancellors have regularly had second Budgets, and some have even had a third. Perhaps, as we get towards the end of the year, if the price of oil stabilises and more money comes in from North sea oil, my right hon. Friend the Chancellor will feel that he can do what I have suggested, and spend more through creative stimulus.
The old phrase "priming the pump" is not dead, though it may be forgotten. It is important that any Government facing rising unemployment should decide how they can spend money to prime the pump and allow people who feel useless on the unemployment list to get back to work, because there is plenty to do. It is there through the construction industry in housing and other areas. There is plenty of scope for work that does not bring in imports and I want to see the Government spending more on that. I believe that the Budget is very good in parts, but I hope that my right hon. Friend the Chancellor will take heed of the need during the year, for building on some very good initiatives, already taken, actually to provide more jobs.

Mr. Richard Wainwright: Like many other hon. Members, I followed with great agreement the polite but firmly critical approach to the Budget adopted by the hon. Member for Stamford and Spalding (Sir K. Lewis), and the similar interventions made by his hon. Friends the Members for Macclesfield (Mr. Winterton) and for Windsor and Maidenhead (Dr. Glyn).
In 20 years I cannot recall the first speech from the Government Benches after the Chancellor had sat down being so critical. That, of course, matched the noticeably subdued atmosphere in which the Chancellor was received at the end of his speech. As many Tory Members will quietly recognise, today's Budget speech was little more than the elegant performance of a busker to a crowd of long-suffering taxpayers and the unemployed, who have now been told that the real show will not open until March


1987. Although the busking had some of the sparkle that we associate with the Chancellor of the Exchequer—thank goodness for that—it was, on the whole, deplorably complacent.
We are accustomed, in the cut and thrust of politics, to other Ministers producing these phoney figures for British recovery, which we all know are derived from the shockingly low base to which the British economy and British manufacturing descended in 1980, and to the fact that we went into deep recession nearly two years before the other industrial powers. We are used to that kind of sleight-of-hand from other Ministers, but it is a bit much for the Chancellor himself on Budget day to indulge in such phoney statistics, and that feeling will be shared by the commentators and most hon. Members. Manufacturing output has not yet recovered to its 1979 level, and those who are neglected and unrepresented in the Cabinet, who live between the Trent and the Tweed, and west of Reading, are painfully aware of that.
There was also complacency in the Chancellor's admission. After making an excessively robust and over-optimistic assumption about oil prices in last year's Budget, he came forward with only one scenario, based on the single opitimistic assumption of an average price of $15 a barrel in the coming year. Let us hope that he is right, but it would have been prudent for the Chancellor to produce also an alternative scenario with the price at about $9 a barrel. In the meantime, he is pushing his luck.
The Chancellor made a great point about the buoyancy of the other direct tax revenues—corporation tax and income tax. Only a few minutes before he boasted of that buoyancy he was deploring—with a great deal of right on his side—the runaway rise of our earnings to a level far above that of our competitors, because the Government pretend to have nothing to do with an incomes policy. The buoyancy of the revenue is a direct consequence of those runaway earnings. Far from welcoming that, the Chancellor should be seriously perturbed that the position is as buoyant as it is. The buoyancy of corporation tax must be a reflection of the poor level of capital investment by industry, which is not claiming the final year's capital allowances to the extent that one would have seen if manufacturing were in a healthy condition.
As always, the centrepiece of the Chancellor's Budget is that absurd totem of the public sector borrowing requirement, which is not even a measure of the true Government deficit and is now an object of idol worship by people who cannot admit how wrong they have been. There is no need for the public sector borrowing requirement to be confined to such a low figure, except, of course, for the fact that the Chancellor is not prepared to admit that he has changed his mind.
The world is anxious to lend Britain money. Other countries see Britain as a safe country in an unstable world, which has an established monarchy, a healthy three-party system, and which is approaching the liberating event of a general election which may restore sanity to British government. There would be no difficulty in raising money. However, the Chancellor is not prepared to be converted to common-sense economics.
The saddest feature of the Chancellor's speech was the absence of the adventurous monetarist who, if he had been true to form, would at least have wheeled. in a new monetary aggregate. I was expecting the Chancellor, the old confident Chancellor, to produce M2 and to command us to worship at that new shrine. However, so weary is he

of the struggle that, blow me, he simply brought back from retirement that miserable, old, failed harridan, M3. He has now said that the upper limit of M3 can be 15 per cent.
The Chancellor is telling us in one breath, as a monetarist, that inflation will come down to a rate of 3·5 per cent., but that the monetary aggregate will rise by up to 15 per cent. That is the final confession of this faltering old doctrine in which no one any longer places any faith.
The distressing part of the Chancellor's recital was his almost contemptuous neglect of the unemployed. What use is it to tell the unemployed that the basic rate of income tax has been reduced from 30 to 29 per cent.? Who has the cheek to tell the unemployed that they can now invest up to £200 a month in a special personal equity plan? What is the use of telling the unemployed that their gifts to others will no longer suffer capital transfer tax?
The Government in this Budget have done nothing worth talking about for the unemployed. The increase in the community programme is small. It should at least have been doubled, and could perfectly well have been. In particular, the biggest gap in the Budget in my opinion—which the House will hear about from the two official spokesmen from the alliance parties during the debates—is the total failure of the Government to do anything about national insurance. They have done nothing about national insurance—the tax on jobs—which reaches a level of 19·45 per cent. in the pound. That tax has remained untouched. What could be a bigger snub to the unemployed than to tell them that the tax on people who want to take them on will remain wholly unchanged? In the alliance's view, there should have been a cut of at least 10 per cent. on all the rates of national insurance contributions as a starting point to eventually getting rid of the tax on jobs.
While I am on this point, I should like to mention that, in order to help the unemployed and to finance community programme schemes and our national assets, there is one step which the Chancellor could easily have taken in the name of common justice. That is the reversal of the crazy situation that has come about under his chancellorship, whereby income from mere investment is taxed substantially less than income from the sweat of one's brow or from the exertion of one's brain in employment.
An employed person pays income tax of 38 per cent.—29 per cent. in so-called income tax, and 9 per cent. in the alternative income tax, known as national insurance. A person who sits back and waits for his dividend to come in pays tax of only 29 per cent. That is a complete reversal of the historic fiscal position whereby unearned income was always taxed more heavily than earned income.
There may be a theoretical case for saying that unearned income and earned income should be taxed at the same rate. I do not necessarily dispute that. However, it is surely unjustifiable to reverse the position so that income from work is more heavily penalised than income from investments.

Mr. Nicholas Winterton: Will the hon. Gentleman concede that, to a great extent, much of the unearned income to which he has referred disparagingly is money saved by people while at work? Therefore, why should that income be taxed at a higher rate? Why should it include the national insurance element, which exists to pay for certain services and facilities which the individual expects from the state?

Mr. Wainwright: Not for the first time, the hon. Gentleman has made an elegant introduction to a point I was about to make—that there must be a reasonable threshold below which income from savings is relatively modestly taxed. Whether the threshold should be £4,000 or £5,000 a year for retired people is a matter for discussion. I accept that income from money saved for retirement should be lightly taxed. The age allowance should certainly be more generous. I was speaking, as I suspect the hon. Member for Macclesfield well knew, of the large investment incomes, of which there are an increasing number, and which are augmented in the City of London at a tremendous rate every working day of the week. People with such unearned incomes should certainly pay more, not less, than wage earners.
The tax threshold remains disgracefully low. It is appalling that some people who are in receipt of only the state pension are assessed to pay income tax because the Chancellor has refused to lift the threshold in a civilised way.
Emphasis has been placed on expanding the experimental job start system from the present nine pilot areas. An employee is paid £20 a week by the state for taking a job in which he will receive £80 or less a week from the boss. That is a subsidy to the employee to persuade him or her to take a low-paid job.
We may judge the effect of extending the scheme to the whole country by looking at what has happened in one of the nine pilot areas—Huddersfield, part of which I represent. Only nine people in Huddersfield have entered the job start scheme since it was inaugurated early this year, due to the efforts of 10 extra staff plugging the scheme. If one extrapolates the numbers involved in the Huddersfield pilot scheme and applies them nationwide—I wish that we could apply much of what happens in Huddersfield nationwide because that would solve many of our problems—one can see that only a few hundred people in the United Kingdom would take part in this rather miserable scheme. I have always thought that it was an insult to human nature to say to a person, "Go on your knees for this meanly paid job and we will make it up to you. We shall slip you twenty quid so that you do not lose too much face with the wife." I do not believe that extending this scheme to the nation will have a significant impact on the appalling and growing unemployment problems.
Liberals, with our emphasis on redistributing wealth, must be aghast at the cancellation of the gift tax without replacing it with something. We have never held a strong brief for the capital transfer tax in the form in which it was introduced by Labour, because that was a silly tax on the giver. We have always said that a substantial, rapidly ascending scale of gift tax should be imposed on the recipient, according to the size of the gift and the recipient's wealth. This would mean that a person of great wealth who was getting on in years would be given every encouragement through the tax system to divide his wealth into a large number of relatively small portions which would be liable for only a modest rate of accession or gift tax or would escape tax altogether. The millionaire who insisted on endowing only his son or daughter with the whole sum would have to warn his children that they would pay a swingeing tax immediately they received a gift of £1 million. That would have been a step forward. To abolish gift tax altogether is an appalling step back to Victorian times and one which we strenuously oppose.

Dr. Glyn: What is the Liberal party's attitude to the efforts made by my right hon. Friend the Chancellor towards encouraging wider share ownership?

Mr. Wainwright: I am grateful again to a Conservative Member for introducing my concluding remarks. I like to wind up on an agreeable note.
I, for one, give an unqualified welcome to what the Chancellor calls the personal equity plan, which provides a strong tax incentive for those lucky enough to be able to make regular investments. We welcome that measure with some pride of authorship, because we proposed it for many years in various forms during Finance Bill debates. Each time we made that proposal the Treasury spokesman—whether Conservative or Labour—assured hon. Members in stern tones that it would cost the earth, that there would be no limit to the demands it would impose on the Revenue and that therefore they could not recommend that their colleagues should support it. Better late than never—I, for one, want to give the scheme a fair wind. We must bear in mind always, however, that it is a scheme for the lucky—for those who can put aside sums for investment. Alas, at the present time, that is only a fraction of our population.

Mr. David Knox: I should like to congratulate my right hon. Friend the Chancellor on his third Budget speech. His first two Budget speeches were well constructed and to the point, and both were brief, as Budget speeches go. Today, my right hon. Friend has maintained the high standards he established on those two occasions. The House should be grateful to him for that.
I welcome the changes concerning VAT and charities, both on the expenditure side—I think particularly of the concession for talking newspapers for the blind—and especially on the giving side. I welcome the Green Paper "The Reform of Personal Taxation", which was published today. Obviously, I cannot comment at present on that document, but it will be carefully studied in the months ahead.
I am glad that my right hon. Friend has increased income tax thresholds. Like my hon. Friend the Member for Stamford and Spalding (Sir K. Lewis), I should have preferred my right hon. Friend not to reduce the standard rate of income tax by 1p in the pound but to concentrate all the relief on thresholds. Frankly, as my hon. Friend the Member for Stamford and Spalding said, the reduction in the standard rate of income tax is so small that it is unlikely to have any effect, and it is especially unlikely to have any incentive effect. I have no desire to make any great point about this. One always welcomes reductions in taxation even if they are not the selection one would have made oneself.
I welcome the increase in the VAT threshold and the improvement in the business expansion scheme. I particularly welcome the new scheme to encourage share ownership. Like the hon. Member for Colne Valley (Mr. Wainwright) I am a member of the Wider Share Ownership Council and I believe strongly in the spread of share ownership as widely as possible in our society, for the reasons advanced by the hon. Member for Colne Valley and my hon. Friend the Member for Stamford and Spalding. I was pleased to hear about the expansion of the


community programme, along with the other measures to help the unemployed. They are nothing like enough, but I welcome those measures as far as they go.
I turn to the general state of the economy and especially unemployment. When I spoke in this debate 12 months ago, I said that unemployment was the principal problem facing Britain. Then the Chancellor introduced what he claimed was "a Budget for jobs". I do not think that it is unfair to say that his expectations have not been fulfilled. Unemployment has continued to rise during the past 12 months and despite the measures announced today, it will at best stabilise and at worst continue to rise in the next year.
Unemployment remains our principal economic problem—as it has been for far too long now. For all the talk about measures to reduce it, unemployment has continued to worsen over the years. I believe that we have now reached the point where this cannot be allowed to continue. This afternoon the Chancellor told us about the Government's success in taming inflation and improving industrial relations. I readily acknowledge and warmly applaud these successes, but for a long time we have also been told that lower inflation and better industrial relations were essential prerequisites for increased manufacturing output and reduced unemployment, yet, last week, I was told by my hon. Friend the Minister of State, Department of Trade and Industry, that manufacturing output was 5 per cent. lower than it was six years ago. We all know what has happened over the last six years and what is continuing to happen today with unemployment. Clearly, lower inflation and better industrial relations are not enough. They have not had the desired effect on unemployment and, frankly, they show no signs of doing so.
I do not believe that the present level of unemployment is necessary or indeed inevitable. From 1945 to 1974, under Labour and Conservative Governments we had full employment. This was achieved on the basis of the policies outlined in the 1944 White Paper on employment, the foreword to which stated:
A country will not suffer from mass unemployment so long as the total demand for its goods and services is maintained at a high level.
In my view, it was because the demand for goods and services in the British economy was maintained at a high level between 1945 and 1974 that we had full employment during those years.

Mr. John Stokes: I have heard my hon. Friend make the same speech for many years. Surely between 1945 and 1974 there was great and hidden unemployment as a result of the massive overmanning in industry, which is the cause of many of our troubles today.

Mr. Knox: I do not want to be diverted too far from my speech. All I would say to my hon. Friend is that there is quite as much under-employment in industry today as there was in those years. If my hon. Friend's point is correct, there would not have been the overall reduction in manufacturing output that there has been over the past six years. It is very worrying to think that manufacturing output today is not only lower than it was in 1979 but is lower than it was in 1973. These facts do not quite substantiate the point that my hon. Friend is making.
I return to what I was saying. I was making the point that in my view it was because the demand for goods and services was at a high level for the years from 1945 to 1974

that we had full employment. Equally, in my view was because the demand for goods and services in Britain has not been maintained at a high level since 1974 that we have had such high unemployment in these past 12 years. I believe that we shall continue to have high unemployment until we return to the demand management policies that were so successfully pursued in the 30 years after the war.
This means that, if we are serious about unemployment, we must raise the level of demand to bring it into line with our productive capacity. This cannot be done straight away. It will take a long time. It will not be easy, but it ought to be done and we ought to start now. The usual retort to pleas for a return to demand management policies is that these were the policies that failed in the 1970s. Far be it for me to say that the 1970s was the brightest decade in our economic history. It was certainly not. But since demand management policies had a proven track record over many years prior to the 1970s, I should have thought that the causes of our problems then were more likely to be those factors that were peculiar to the 1970s—the breakdown of Bretton Woods, the commodity price explosion of the early 1970s, the escalation of oil prices in the mid-1970s and again in the late 1970s, and the flow of oil from the North sea. All these caused economic chaos at home and abroad and they provide, for me, far more plausible reasons for the difficulties we faced in the 1970s than demand management policies based on the 1944 White Paper.
I believe that we must return to this approach to the management of our economy as a matter of urgency, and I regret that that was not announced today. Today's Budget will raise output only by the underlying increase in capacity. It will not raise the level of economic activity sufficiently to take up any slack and so reduce unemployment. In my view, the Chancellor should have taken much stronger action to raise the level of demand and so the level of activity. Only the Government can do this. It can be done either by cutting taxes without decreasing public expenditure or by increasing public expenditure without increasing taxes or by a mixture of the two. In my view the Chancellor should have increased thresholds by even more than he has done and he should have introduced a substantial programme of public expenditure on the infrastructure—on roads, railways, education, the Health Service, housing and, above all, housing improvements.
These measures would be additional measures and no extra revenue should be collected to pay for them. Of course, such a policy would involve an increase in the public sector borrowing requirement. In terms of resources, there is no reason why this should be inflationary because there is plenty of spare capacity. In terms of finance, the initial increase in the public sector borrowing requirement would, to some extent, be reduced as benefit payments to the newly employed fell and tax receipts from them rose. Nor would interest rates be likely to be affected, as their main determinant is the level of international interest rates rather than domestic factors.
At present, the British economy is operating at about 20 to 25 per cent. below capacity. Over 3 million people are out of work. A large number of people are engaged in schemes to alleviate unemployment which are, frankly, not very productive or economically beneficial. Millions at work are under-employed and enormous capital assets are under-utilised. If we are serious about creating jobs and reducing unemployment, the level of demand must be


increased. If unemployment is to be conquered, we must go for a rate of economic growth which is faster than the underlying growth of capacity. I regret that the Chancellor chose not to take such a course today.

Mr. Roy Hughes: I agree with many of the sentiments expressed by the hon. Member for Staffordshire, Moorlands (Mr. Knox). He has made many speeches of a similar nature in the House and he is to be commended for that.
First, let me deal with the good things in the Budget. There are some good proposals, although Opposition Members recognise that they are few and far between. For instance, the tax relief for charities is to be welcomed. One cannot but admire the work done by voluntary organisations in our society today, particularly for the disabled. There has been a great increase in that work. My only proviso is that it is essential to define what is a bona fide charity. I should hate to think that, for instance, Eton school would benefit from those proposals.
The Chancellor has announced an 11p increase on a packet of 20 cigarettes. Such an increase was to be expected. If it is the last straw that assists people to give up that unhealthy habit it is a good proposal.
Petrol taxation must be seen in the context of the rise in the costs of transport, because a rise in transport costs increases the cost of just about everything else. Therefore, it is essential to ensure that the oil companies are brought into line so that petrol prices do not rise. As the Chancellor has pointed out this afternoon, there is no need for them to do so.
It needs to be appreciated that the vast bulk of freight—8 tonnes out of every 10 tonnes—now goes by road in Britain. Likewise, the car is no longer a luxury. In Britain, 25 million people hold a driving licence and nine out of 10 passenger miles are travelled by road. Road taxes now stand at over £12,000 million, yet the national expenditure on our roads is not a quarter of that figure. Therefore, the Chancellor made a wise decision not to increase petrol taxes directly in line with the recent fall in prices due to the collapse of the oil market.
This is the Chancellor's third consecutive Budget. Like earlier speakers, I give him full marks for presentation this afternoon. The right hon. Gentleman's first Budget was described as a Budget for enterprise and he still insists on talking about recovery. But we are entitled to ask him: what recovery? That is particularly so when manufacturing output is still 6 per cent. below the 1979 figure and when manufacturing investment is still 10 per cent. below the 1979 figures. Our new deficit in manufacturing trade is set to shoot up to £4·5 billion in 1986. Training has been drastically cut, with engineering apprenticeships cut to around 9,000. Meanwhile, bankruptcies in 1985 hit a new record. That is the picture of Britain's recovery that the Chancellor chooses to forget.
Last year, the Chancellor's Budget was said to be one for employment. Then unemployment increased by 115,301, so he did not have much success in that respect. Up until a few weeks ago it was said that this Budget would feature tax handouts. Then the bottom fell out of the oil market, so the Budget format had to be changed. We are now presented with yet another Budget for employment. In the months ahead we shall watch the

employment figures with great interest. Meanwhile, to pretend that the puny employment measures in the budget will do anything more than scratch the surface of this horrendous problem is simply an exercise in kidology.
Unemployment has been compared to a tap left running—sheer waste. The figures bear out that contention. For instance, the annual cost of keeping 3·3 million people out of work in lost revenue and benefit is conservatively estimated to be nearly £17 billion. That would be enough to abolish VAT or to halve the standard rate of income tax.

Dr. Norman A. Godman: Is my hon. Friend aware that one aspect of the reversal of Government policy vis-a-vis the unemployment problem—which was revealed in an answer to a parliamentary question two weeks ago—is the creation of fully 5,400 jobs in local Department of Health and Social Security offices up and down the country?

Mr. Hughes: That is one means of creating jobs, but not exactly the most satisfactory one.
More than 1·3 million have been out of work for more than a year. Half of that number have been unemployed for three years or more. Those figures point to much demoralisation and they engender the social problems which are becoming such a feature of our society.

Mr. Laurie Pavitt: My hon. Friend has hit the nail on the head. In addition to social problems, unemployment affects health. The Secretary of State continually points to the increasing demands on our Health Service, yet all the research shows that demands on the hospital and family practitioner services have trebled because of the effects of unemployment on health.

Mr. Hughes: My hon. Friend has been in the House a long time and I know that he speaks with vast experience on that subject. A survey carried out in my constituency in Newport some months ago bears out the increase in health problems as a result of mass unemployment. We in the Newport area suffered heavily from massive steel redundancies.
The Government have no political will to tackle unemployment. Many individuals and bodies have recognised the follies of the Government's economic policies. As my right hon. Friend the Leader of the Opposition pointed out this afternoon, there is an alternative. In Wales, on St. David's day this year we had what is known as a declaration on unemployment. Signed by prominent men and women throughout the principality, it said:
We are a group of people with different views on political and social questions, but we all think the present level of unemployment in Wales is intolerable. It has destructive social and economic effects, and demoralises those who are not given the opportunity of contributing to the community through useful work. There have been developments in policy to deal with the problem, but there is much more that can and should be done. The objective now must be to achieve a substantial fall in unemployment. We therefore urge the Government to take effective measures to expand the economy, and otherwise to create, for those now unemployed, more opportunities of doing useful work.
As I said, that document was signed by a group of non-political prominent citizens in Wales. They know and realise that something can and should be done about the problem of unemployment.
The recent report of the Conservative-dominated Select Committee on Employment put forward detailed proposals


for the creation of 750,000 jobs specifically for the long-term unemployed in urban rehabilitation, health care and private industry, with a sweetener of £40 per week to the employer. The cost of the proposals is put at just over £3 billion over three years. That is a third of the amount earmarked for tax cuts in the same period. My right hon. Friend the Shadow Chancellor recently put forward Labour's carefully costed proposals for creating 1 million jobs in two years. Why cannot the Government take some positive action to tackle the horrific problem of unemployment?
Twenty years ago this month I was elected to the House. The following year I recall the Budget of my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan), on 11 April 1967. He launched his Budget with the slogan "Steady as she goes". Some of us, particularly the new Members, thought that he was being a bit too steady at the time. However, he had some justification for acting in the way he did, bearing in mind that at the time unemployment stood at 610,500–2·61 per cent. of the work force. Now, unemployment figures show 3·3 million people out of work, with countless thousands more ready to take up employment if a suitable vacancy occurs. In that sense, the Budget we have heard this afternoon could well be described as "steady as she sinks".
With this Government, there is no hope for people out of work, but the Labour party has the policies to tackle Britain's fundamental problems. I am increasingly confident that, after the next general election, the Labour party will be given the opportunity to introduce its policies.

Mr. John Stokes: I have always been an admirer of my right hon. Friend the Chancellor, and I believe that his Budget speech today, which was a very clever one, has encouraged his supporters and not given any ground to his critics. In all, I think that he has done a very good job and it will be difficult for the Opposition to try to find much fundamental fault with the Budget.
My right hon. Friend may not be very good at kissing the babies, but he never takes his eyes off his main aim, which is to get the economy right by squeezing out inflation—we have heard so much about inflation from Opposition parties—getting back to honest money and controlling public expenditure, which is always difficult in any democracy. Everyone knows what a difficult task he had this year with the sudden diminution in the oil revenues. I believe that both he and the country will gain in the long run by the great drop in the price of oil. It is bound to be good for world trade, for our manufacturing industry and for my part of the world, the west midlands, where industries have suffered so much during recent years.
The whole trend of the Government's policies is to try to get the state off the backs of our people so that they can harness their energies to help themselves with the least hindrance or interference from Government. I was horrified to hear of one case which will give an example of our extraordinary society. An old lady died of hypothermia in a large town where eight of her children were living nearby. Surely we must try to encourage in every way possible a personal, individual and family sense of responsibility.
We all know that taxation is still far too high. It is now clear that we shall have to wait another year before it can be substantially reduced. However, I welcome what the Chancellor has done this year. I particularly welcome the help to the lower paid. Even so, more needs to be done to give an incentive to all those who wish to work and earn a living if they possibly can.
I also welcome the further measures to help the unemployed—which I do not underplay as some Opposition Members do—and to improve training. Training is vital to our industrial and commercial future and to enable us to fight off foreign competition. I welcome the cut in the stamp duty on shares. Share ownership should extend much more widely until nearly everyone is a shareholder in one way or another. Of course, I welcome the special help given in the Budget to the small investor.
I must now say something from the heart which nobody else has yet said and which I say as a high Tory. I am disappointed that the Chancellor did not tax the banks. As an old-fashioned Tory who much prefers the landed to the moneyed interest, I am always inclined to look with a jaundiced eye on the banks and the working of some of the institutions in the City. The banks could have done more to help the small business man. We all know, from their marvellous offices with their thick pile carpets, their lunches and everything else, that they can easily make money without anything like the sweat and tears of the ordinary industrial business man.
Of course I am proud, and we should all be proud, of the City and of the great part it plays in our national and economic life. However, there are blemishes. My father and grandfather both worked in the City. They were both successful but I think that they were modest men. Certainly, in the Stock Exchange they took enormous pains with the private client. Today that spirit and tone is not as it used to be. A new breed of men, slicker, smarter and more ruthless than ever, have come in and they do not do this country any good.
We know of the dishonesties that unfortunately have affected parts of the City, and I am sure that the Government will tackle those as vigorously as possible. I am surprised that no one has mentioned, the strident vulgarity in the colossal advertising campaign—whole page after whole page in the national press—in the takeover battles. These do no good. To see great companies slanging each other in knocking copy is quite disgraceful. I wish the Chancellor would curb those activities and put swingeing taxes on such advertisements.
I am also concerned about some of the transfer fees, as they are called, and astronomic salaries of very young men in the City which bear no comparison to salaries in industry or anywhere else. That is something which the Chancellor should keep his eyes on.
People expect increases in the taxes on drink, tobacco and petrol, at least as much as the increase in inflation. I think that we have been agreeably surprised this year. The tax on petrol was minimal, there is no tax increase on spirits which, after all, are expensive, and the tax rise on cigarettes was what most people expected. Even so, I much prefer indirect to direct taxation.
We are all looking forward to reductions in the bank rate. However, important as that is, it is even more important for management in industry not to grant wage


increases which are greater than the rate of inflation, or greater than the productivity of the organisation concerned.
In spite of all the Government's critics, and all that we have heard this afternoon, there is a great deal now going for the Government. The pound has not collapsed with the fall in oil prices, the stock market is booming and the Americans and other foreigners wish to invest here. Production and productivity are increasing year by year. World commodity prices are falling. International interest rates are falling. Soon house mortgages and credit will be cheaper. In time I believe that, following the drop in the price of oil, the unemployment figures will start to fall—I hope substantially. Industry is much more efficient and one hopes to see British goods taking a greater share of the home market.
Reference was made earlier in the debate to the need to increase demand. But the demand is there. The Sainsburys, the Waitroses, the car showrooms and the shops that sell refrigerators are packed with people. The problem is that they are buying foreign, not British goods. The answer is not to pump more money into the economy but to get British firms to become more efficient. There is no other way. That is what this Government have been trying to do and they have succeeded in doing it. Exports are good and I believe that they will improve still further.
Let the Opposition remember that, despite the black spots—all of us know that there are black spots—people in this country, as we have seen from the official figures in "Social Trends", are more prosperous than ever before. The Government should be able to take some credit for that.
In spite of all the unemployment, I have noticed in my constituency that for the first time many people are buying their homes. Many of them have a motor car and many of them go abroad for their holidays. All of them are becoming Conservatives. They are some of the strongest supporters of this Government. I find that in the main the complaints come from those in the very high income brackets. Fortunately, there are more people in the lower income brackets than in the higher income brackets and I therefore have little fear about the outcome of the next general election.
There is no cause whatsoever for us to try to make the Government change course. To do so would mean that all the sacrifices that have been made in recent years have been in vain. Within a few months the International Monetary Fund would be called in again and there would be a colossal economic and financial crash. Any weakening of resolve, as is suggested by some of our more timorous brethren, would be disastrous. I congratulate my right hon. Friend the Chancellor of the Exchequer. I believe that the country at large will give a very warm welcome to his Budget.

Mr. Austin Mitchell: The hon. Member for Halesowen and Stourbridge (Mr. Stokes) will forgive me if I do not follow him too far in his revolutionary and daring attack upon the banks. All I would suggest to him is that when he assaults those marble halls he should put Barclays bank, Otley road, Shipley, first on his list.
This is Sheikh Yamani's first Budget in his new period of dominance of the British economy. I hope that Sheikh Yamani will be better as a maker of Budgets than the right hon. Member for Blaby (Mr. Lawson), whose first Budget for enterprise saw our share of world trade drop disastrously and whose second Budget for jobs saw unemployment rise precipitously. Therefore, Sheikh Yamani's Budget might have a slightly better effect.
The Government have been robbed of a confidence trick that they were hoping to play on the British people. It was clearly the Chancellor of the Exchequer's intention to come to this House on Budget day and claim that the benefits to this country of oil tax revenues and their effect upon our economy were the result of the Government's policies and that the fruit of those policies would be tax cuts. That would have been a confidence trick. The Chancellor has been robbed of the ability to play that confidence trick.
Sheikh Yamani's impact in reducing the price of oil is a foretaste of what is to come. It is a foretaste of the problems that lie ahead for the British economy as the oil revenue contribution begins to run out. When that happens, this Chancellor will have left us disastrously exposed. The Chancellor and the Government have weakened and undermined the alternatives to oil by neglecting the manufacturing sector of the economy upon which we used to depend for our balance of payments survival. The Government have destroyed a quarter of this country's manufacturing base. They have destroyed 1·8 million jobs in manufacturing industry. They have turned us from being a net exporter of manufactured goods into a net importer of manufactured goods. That will leave us disastrously exposed when the oil price comes down precipitously, as it already has. We have come to the end of the easy, irresponsible years that the Chancellor and his predecessor have thrown away. We have come to the nub of the problem: what to do after oil.
There were two approaches to the oil wealth which Britain began to enjoy under this Government and which distinguished this Government from every previous Government who did not benefit from oil wealth. The first approach—the sensible approach that the Labour party would have adopted to oil—would have been to invest that wealth in our productive economy. It should have been used to rebuild our creaking productive economy and provide a massive overdraft facility in order massively to expand the economy. Our oil wealth would have allowed us to do that by ending the balance of payments constraints which had checked every previous attempt at expansion. In other words, it could have been used to run the economy in a way which would have produced growth to offset the effects of our oil wealth upon the exchange rate.
It would have been sensible to invest in this country and to build up productive assets and resources, which would have enabled us to grow and expand in a way that had never been possible before. However, the Government chose the opposite approach. They allowed oil to push up the value of the pound. They compounded that process by their consistent policy of high interest rates, which have kept the pound grossly over-valued throughout this period. Consequently, our manufacturing base has been ruined.
The high value of the pound has facilitated the massive export of capital—stashing away overseas the benefits from oil. This has benefited not the whole community, but only some of the community. Our transient oil benefit has been invested not in the productive capacity of this country


but in the productive capacity of our competitors. The Government chose that alternative. They have used the balance of payments benefits of oil to pay for imported manufactured goods, which have destroyed jobs in this country. The Government have used the tax revenues from oil to support those who are now unemployed because of the effects of oil on the balance of payments. It has been an absolute and total folly. It has resulted in a waste of oil revenues and it has compounded the industrial and manufacturing problems that we faced before the oil came on stream. Having wasted that asset, the problem is what to do about the situation that the fall in oil prices has generated. There are two responses—

Mr. Nicholas Winterton: Will not the hon. Gentleman pay credit to those companies that operate overseas and that last year brought into this country invisibles that amounted to £7·5 billion net? Will he not pay a tribute to industry which has invested £60 billion in new equipment and buildings in this country?

Mr. Mitchell: The bulk of our exports have been in the form of the export of capital and portfolio investment. Last year it amounted to about £20 billion and it was invested in productive capacity overseas. There have been some success stories, but the main reason for firms investing in jobs overseas is that it has not been profitable to invest in this country because of the way in which the economy has been run by this Government.
There were two responses. The first would have been—the Chancellor could have gone for it today—to increase taxation or borrowing to compensate for the loss of oil revenue. According to the autumn statement prediction, that loss must be about £7 billion. That could have been combined with a lower interest rates policy, which would have provided for some expansion of the economy.
The alternative approach would have been to keep interest rates high in order to strengthen the capital account and bring in money to compensate for the weakening of the current account balance of payments, thanks to the falling price of oil. At the same time, demand could have been damped down and taxes cut. The two approaches are alternatives and to a large extent they are mutually exclusive: increase taxes and lower interest rates, or increase interest rates and hope to expand by lowering taxes, which is what the Chancellor has done. The latter has the advantage of no inflationary consequences and no odium for the Chancellor as a result of increasing taxes, but it is the weaker of the two alternatives because interest rates will remain high. There have been persistent rumours, like a kind of continuous mirage dangled before the people, of interest rate cuts coming but never quite arriving. After the mountains have laboured in this fashion, there might be a squeaking mouse of a minor interest rate cut.
Interest rates are much higher in this country than in the countries of any of our competitors. In real terms, allowing for inflation, they are probably double the level of most of our competitors. Although there will be a minor reduction, interest rates will remain high. That imposes a crippling burden on everybody—on the householder, on the person with an overdraft, on local government and, most of all, on manufacturing industry, which needs finance for investment. We need a dramatic increase in investment, bearing in mind the figures given earlier about

the fall in investment. This economy will not get the benefit of the expansion that will occur overseas because of the fall in the oil price. As a result of the strategy of high interest rates, there will be no fall in unemployment—the crucial problem that the Chancellor needed to tackle.

Dr. Godman: Is not one of the most realistic indications of the Government's performance over the last few years the fact that almost 40 per cent. of the population of the great city of Glasgow has to subsist on social security?

Mr. Mitchell: That is exactly right, and the Chancellor has not allowed for the horrendous cost of unemployment. It must be costing the Exchequer about £20 billion. I do not know the latest estimate for each person out of work, but it may be £5,000 or £6,000 a year and that represents a horrendous cost to the Exchequer. The Chancellor is in that situation simply because he has run the economy for deflation and for discipline rather than for growth and expansion. The problem he should have faced is what to do now. The prescription the Chancellor should clearly have gone for is one to reduce interest rates as a central aspect of Government policy. There is no point in saying that markets decide interest rates, because interest rates are under the effective political control of the Government and can be brought down by the Government. The minimum reduction necessary is 4 per cent., which would bring us down to somewhere near the level of our competitors. It would not bring us to their level, but it would be somewhere near. That is the key to getting the pound down, because the pound is still grievously overvalued, especially against the deutschmark, where the overvaluation is about 30 per cent. To become competitive with the deutschmark we would need a devaluation of about 22 per cent.
The sterling index, at 74, is now substantially up on its low point of last year—4 per cent. up in money terms and much more in real terms because our inflation rate is that much higher. Unless we reduce interest rates and bring the pound down with them, we will not be able to participate in the world expansion. We will not be able to stem the rising tide of imports and get back into the markets we have lost overseas. That is because our export prices are now some 30 per cent. higher than they were on average for 1973 and 1976, and they were not especially competitive then. How are we to get back into the markets that we have lost without a competitive currency? That competitiveness is conditional on getting interest rates down.
The second approach of the Chancellor should have been to borrow and spend. There is nothing like public spending for stimulating the economy, creating growth and putting people back to work. I should like to offer the Chancellor Mitchell's law. If he looks at the G5 economies over the six years from 1979 to 1984 he will find a direct correlation between the increase in public spending in those economies and the level of unemployment. The biggest increase in public spending—8·6 per cent.—was in the United States, and the unemployment increase in the United States has been only 1·6 per cent.
In Britain, at the other end of the scale, the total public expenditure increase has been 3 per cent. and the unemployment increase has been 8 per cent. The other economies are ranged at intermediate levels depending on how much they have increased public spending. Public


spending is the only way of using the under-used resources in our economy and the only way of giving our economy the kind of stimulus that President Reagan gave the American economy and which resulted in the creation of 8 million jobs. There is no point in saying it cannot be done, because 8 million jobs have been created in America in less than three years. That is the kind of expansion we need, spending not on the same objectives of defence and armaments but on useful public purposes.
The Labour party proposes an increase in the public sector borrowing requirement of around £6 billion. That is an increase on top of the present level plus asset sales—in other words, an increase on top of the £12 billion public sector fiscal deficit. That would put unused resources back to work. It would put building workers back into jobs and tackle the housing crisis that is building up. That is what the Chancellor should have got on with.
The third matter to which the right hon. Gentleman should have devoted some attention is clearly social justice. He should take back from the richest 5 per cent. of our population, those earning over £25,000 a year, the benefits that have been showered on them in a continuous dribble of about a dozen concessions in each Budget under this Government. There have been concessions in capital transfer tax and capital gains tax. More benefits in capital transfer tax on unearned income have been repeated today, to an amount of about £3·6 billion annually, and that has all been given to that richest 5 per cent. If that is taken back—and it can be taken back—we could use that money to increase pensions by £5 for a single pensioner and by £8 for married pensioners. We could increase child benefit by £3 and put the long-term unemployed on the long-term supplementary benefit rate, which is where they should have been all along. That would stimulate the economy, because those people spend their money on British goods and not on buying BMWs and on overseas trips. That is a stimulus and a matter of social justice that it is essential to fulfil.
The fourth purpose is an expansion of employment schemes. It is tragic to see how little has been done in the Budget for the unemployed. Why could the Chancellor not take up some of the schemes put forward in the report from the Select Committee on Employment on special employment measures and the long-term unemployed? That Committee put forward three proposals: a building improvement scheme to provide 300,000 jobs; the employment of 100,000 long-term unemployed in the social services and the National Health Service; and the introduction of a subsidy to private employers to take on long-term unemployed in addition to their existing employees. The total cost of those recommendations was only £3·3 billion.
Why has the Chancellor devoted so little of his Budget to the necessary objective of bringing down the horrendous level of unemployment? I concede that the Government have been absolutely brilliant at bringing down the unemployment figures, thanks to all the fiddles, manipulations, changes, doctoring, Tebbitising and sanitising that has gone on. What they have not brought down is unemployment, because it has continued to rise to a point where the long-term unemployed are now four times more numerous than they were at the height of the

depression in the 1930s. That is a national tragedy and a waste of human resources, yet all the Government can do is manipulate the figures.
The Government tell us that they have created 700,000 new jobs since 1983. They do not say that most of those jobs are part-time and filled by women. They do not say that the net loss in jobs since the Government came into power is 1·1 million. Those jobs have been thrown away since 1979. Jobs lost in the whole of the Common Market for the same period have amounted to only 500,000, less than half the number of jobs lost by this Government. We have a national tragedy and a national problem because our unemployment level, disguised though it is, is now higher than that of any major industrial country. It is a horrendous burden on the productive economy and that burden must be eased, not only for social justice but for economic efficiency.
Those are the priorities that the Chancellor should have gone for. As usual, being the artful dodger of economics, he has gone for fast footwork and has held out mirages about tax cuts to come next year—the infinitely postponed and never arriving tax cuts which have been the centrepiece of the Government's dangling carrot to lure Back Benchers through to the next election.
The reduction in the oil price provided an enormous opportunity for the economy, which should have been seized in this Budget. It is equivalent to an increase in the money supply. We could have done it for ourselves six, five, four, three, two or even one year ago. We had the ability to give the same stimulus to the economy by increasing spending and even by reducing taxes when we had high oil revenues. Now the benefit is being forced on us by Sheikh Yamani, whose budget this is. We could have done it for ourselves but we had to have it forced on us by the kindly sheikh.
It is an opportunity to expand. Given the way the Government have ruined the manufacturing sector, our need to expand is more crucial and more desperate than that of any other competing economy. It is a matter of national survival. Unless we rebuild the manufacturing sector, expand industry and get the economy to grow again, how are we to pay our way in the world when the oil contribution fades away entirely? How are we to provide jobs for our young people? How are we to provide the growth to improve the standard of living, which is what the modern electorate wants? How are we to provide the public spending to improve the quality of life, which the public have a right to expect? How are we to do all those things and avoid the fate of a miserable, embittered, declining, divided society, which is where we are heading unless we expand the economy and rebuild the productive sector so that we can provide jobs and survive?
At the end of all the wasted years under this Government it will be tragic if we are to go back to the same balance of payments constraint which has strangled growth in almost every decade since the war. If the Government throw away the benefit of the oil price reduction it will be a national tragedy. To make amends to the people, the Chancellor should have done something in this Budget. Instead, with the same old irresponsibility, he is mortgaging the future by continuous and increasing asset sales; he is desperate to pay the cost of unemployment by selling off national assets. What is more, he is selling them off at a cut price.
The prices that the Government are getting are so inadequate that it is almost as if these were distress sales.


A business man's Government cannot even get a good price for the assets which they are flogging. What a farce that is. They are not even making sensible use of the money they are getting from those sales. They are laying in store horrendous problems for the time when those assets will no longer produce revenue. Because of the asset sales, particularly gas, there will have to be an increase in taxation. The Government should have used the money from asset sales to deal with unemployment.
This, then, is an irresponsible Budget from an irresponsible Chancellor. The Chancellor should have taken the name of Omar Khayyam, with this Budget as his Rubaiyat. The slogan is, live for today: "Take the cash in hand and waive the rest," or, take the cash in hand and wave the Order Papers, as Conservative Members did earlier. I remind them and the Chancellor that there is still the brave music of a distant drum beating out the toll of what is to come as the oil contribution fades away and vanishes entirely. What do we do then to survive? [Interruption.] It is all right for hon. Gentlemen to make sedentary interjections about services. They will not provide jobs for kids and the wherewithal to survive We have now to provide for the hard future which is to come.
The best ephithet on the Budget comes from a compendium of abuse drawn up by the Chancellor's colleague, the Secretary of State for the Environment. It is a quotation from Kipling which sums up the Chancellor's approach and the economic strategy of the Government:

"I could not dig, I dared not rob;
Therefore I lied to please the mob.
Now all my lies are proved untrue
And I must face the jobs I slew.
What tale shall serve me, here among
Mine angry and defrauded young?"

Mr. Edward Leigh: The Budget will be welcomed precisely because it rejects the calls for fiscal irresponsibility which we have heard from the Opposition. The Chancellor has today reasserted his commitment to what The Times yesterday called
stability in the large numbers, designed to vanquish inflation and foster growth combined with supply side changes designed to stimulate industry's response to the changed economic climate.
The crucial question facing the Chancellor is how far the Budget will advance us down the road to popular capitalism—the very phrase which he used in his Budget speech.
In three generations, thanks to generous tax incentives, home ownership has increased from 10 to 60 per cent. of the population. The property-owning democracy is a fact. But the share-owning democracy, the industry-owning democracy, the pension-owning democracy, the education-owning democracy and the health-owning democracy remain dreams. The generation of new wealth to finance those dreams from large cuts in the basic rate of taxation will remain a dream after the Budget, although the Chancellor has made an excellent start.
I intend to show how we can continue the Chancellor's work of making those dreams a reality. We should aim in this Parliament and the next, after the Conservatives have won the next general election, for large tax cuts. I can do no better than point to international comparisons and then to the American experience. If we take the single person's liability to basic rate income tax and social security rates

in a group of countries, we find that the United Kingdom is still unfortunately top of the league. The amount taken by the state in the United Kingdom is 39 per cent., in West Germany 36 per cent., in the Netherlands 35 per cent., in France 22 per cent., in Japan 20 per cent., and in the United States 18 per cent. That is not a record for a Conservative Government, albeit doing their best, to be proud of. As the Chancellor said, it is no accident that the United States and Japanese economies are the most successful in the world.
What is even more instructive is the United States experience following President Reagan's tax cuts in 1983 which reduced taxes to the average of the 1970s. In an article in Challenge, Alan Reynolds wrote that it was
never claimed that such a modest cut in tax rates would instantly raise taxable income enough to offset any revenue loss. The claim was instead that dynamic gains in economic growth over time would reduce spending on subsidies, transfer payments and bail-outs".
He added that after tax cuts
the big boost was … from business investment, housing, and consumer durables. Real government purchases actually fell, and true consumption (services and nondurables) was quite weak. Exports staged a good recovery, despite poverty in the developing countries, and imports in 1983 were only 7·5 per cent. of GNP—down from 9·2 per cent. in the weak-dollar years of 1979–80. In the first half of 1984, business investment sped up to a 20 per cent. rate of increase, and real GNP growth averaged a marvelous 8 per cent. between the second quarters of 1983 and 1984. Far from being an inflationary boom, as the monetarists had predicted, or a Keynesian consumer boom, the Reagan expansion has been an investment boom of unprecedented proportions…Clearly, reduced marginal tax rates on capital did induce more investment, and reduced tax rates on labor were favorable to both investment and employment.
The efficacy of tax cuts is proved by international experience, and particularly by the American experience in recent years. Cuts in the base rate are preferable to increases in tax thresholds. I did not expect the Chancellor to have the courage to cut the base rate today, but I am delighted that he has done so. I suspect, and I hope, that it augurs a base rate of 25 or 26 per cent. by the end of this Parliament.
I know that the arguments between raising the thresholds and cutting the base rate have gone backwards and forwards over the years. My hon. Friend the Member for Stamford and Spalding (Sir K. Lewis) said today that if a change in the level of base rates was to have any significant effect on, for example, work incentives, it would have to be at least 2p in the pound reduction. I can only say to him, "Where do we start?" We have made a successful start today. The problem facing the Chancellor, of course, is that, because allowances have to be indexed each year, there is a built-in ratchet effect for future years, which means that there is a tendency for base rates to be reduced only in exceptional circumstances.
It is often said that an increase in tax allowances is the way to deal with the poverty and unemployment traps. The Institute for Fiscal Studies, in its budget briefing for 1986 estimates—this is an interesting point—that had
the resources used to increase allowances been used to cut the basic rate, it could now be down to 26·5 per cent.
The question to be answered now, therefore, is, should we carry on down the road of increasing tax allowances, or should we go for an all-out drive for cutting the base rate?
It is interesting also that the IFS document says:
The argument for cutting taxes by raising allowances has frequently been that the poverty and unemployment traps are relieved by taking people out of tax. It has been shown elsewhere


(Dilnot 1984; Kay 1984) that raising allowances is in fact a remarkably inefficient way of relieving the poverty trap, and an ineffective way of relieving the unemployment trap.
However—the institute says this, not I—
a cut in the base rate has a greater effect on the unemployment trap".
Those findings prove to me that there is little appreciable benefit, if we are talking about relieving the poverty and unemployment traps, in going for modestly raising tax thresholds rather than for cutting the base rate. But the great advantage of a cut in the base rate is a psychological one, because whether tax cuts are a good thing or not depends very much on whether they are capable of getting the economy moving. I believe that the American experience proves that they can do so.
What now of the drive towards a real participating democracy in which ordinary people can aspire to personal ownership of the major institutions that affect their daily lives? I am delighted that we are implementing today another successful United States device—a pension shelter. When I was writing this speech this morning, I never expected that the Chancellor would institute such a successful device. In America people are allowed to hold a personal investment account which is not taxable and is set at a $2,000 limit. This tax shelter concept has worked brilliantly in the United States, and the Chancellor will be pleased to hear that it has resulted in some people in their twenties investing $2,000 in a pension fund being offered at retirement no less than $1 million because of the intense competition for their accounts. It seems incredible to us that the scheme in America has actually been making millionaires of millions. The whole point is that it is a tax shelter around an infinitely transferable, personal and regularly itemised account, with personal statements, just like a bank account.
In Britain today we are extending the tax shelter to British industry. Imagine the stimulus that this will give to interest in shareholding and, of course, to British industry. The Chancellor is to be congratulated on overcoming the Treasury's traditional blinkered view of investment accounts. The hon. Member for Colne Valley (Mr. Wainwright) mentioned this. The Treasury has thought historically only in negative terms of forgone revenue. If that Treasury view, which the Chancellor has today overcome, were to be accepted, there would never be any progress towards the kind of supply-side economics that have proved so successful in the United States.
Needless to say, starting in a small way, the investment tax shelters could be extended to health and education schemes. The sale of British Telecom has shown the way forward, but if we are to make shareholding more than just a hobby for the small investor we must use the tax structure to encourage him. These reforms could easily be accommodated, and are being accommodated, within the existing PAYE and social security systems. But if the two systems were fully integrated, as I hope they will be following the issue of the Green Paper today, the political barriers in their path would, I believe, be far fewer.

Mr. Nicholas Winterton: My hon. Friend has made an extremely good point, and he has mentioned British Telecom, which too often, perhaps, is mentioned to hon. Members. Will he also mention, as our right hon. Friend the Prime Minister has mentioned today, the great and growing success of British Aerospace, which was offered

on the British stock exchange by the Government and is proving to be an outstanding success involving outside money in something which hitherto was contributed to only by the Government?

Mr. Leigh: My hon. Friend makes a valid point and I concur with his remarks.
I was referring before his intervention to the integration of tax and benefit systems. I am amazed, having done some research into this, at how little research there is, either within the Treasury or outside, into how tax credit systems would facilitate share-owning investment schemes. I should like the Treasury to study how tax credits could be provided for each activity which the Government are clearly desperately anxious to encourage. Would it be possible, for instance, to provide a credit of £X for each individual for housing, which would meet in total the cost of state housing and could be topped up for higher-priced private housing? Would it be possible to give each individual a credit of, say, £Y equivalent to the cost of state education, which could be topped up with taxed income for more expensive private education? Why should these credits not be universally available, not just as tax-deductible expenses, as under the present systems, but as a universal right for the whole population?
All these ideas point in one direction—a new impetus to extending free choice for the individual. That aim demands not consolidation, but, as the Prime Minister has said, and as the chairman of the Conservative party has reiterated again this week, radical policies to ensure that there is real public pressure, not for increases in central and local government spending, but for greater opportunities to relieve the state of the burden of deciding how and what is to be provided for the individual and for letting the individual himself decide his own priorities.

Mr. Laurie Pavitt: Budget debates are always about figures and in the three minutes that I have I hope to make five points.
This is my 27th Budget. Having listened to Conservative Members, I believe that one of the problems resulting from the last six or seven budgets—since 1979—is that the country has been divided as never before. Sometimes when I hear Conservatives talking I feel that they live in a very different world from me.
I want to take up a few of the points that emerged as the Chancellor of the Exchequer glowered across the Dispatch Box at us and, as usual, gave us naught for our comfort.
First, I cannot reconcile the right hon. Gentleman's comments about housing with what happens at my Saturday morning surgery. There are 650 homeless families in sleazy accommodation in Paddington, 15,000 people on the housing list, and my ratepayers are paying £40,000 a week, but I hear the Chancellor talking about the marvellous housing that has been provided under the Conservative Government.
I welcome very much what the right hon. Gentleman has done about VAT for charities but, like my right hon. Friend the Member for Islwyn (Mr. Kinnock), I hope that he does not mean that Eton will get a bit more. I hope too, that as a result the Chancellor will do something about the grants for citizens advice bureaux, which are non-political and are under pressure because their grants are being cut off.
I do not have the time to go fully into the question of the unemployed, but I want to add one point to the excellent speech by my hon. Friend the Member for Newport, East (Mr. Hughes). The Minister for Health comes to the House time and time again saying that more is being spent on health but also that more people are ill. I never thought that the Health Service was about more people being ill. However, if there are 3·4 million unemployed, the amount of illness that that generates means that the taxpayer has to find much more money for looking after them.
As the House knows, on 14 February the Chancellor of the Exchequer gave me the figure for taxation on cigarettes. I welcome very much the fact that he has now got £350 million extra. I hope that he will use that to remove prescription charges from very bad cancer cases and will also do something about sports sponsorship.
Debate adjourned.—[Mr. Durant.]

Debate to be resumed tomorrow.

Royal Assent

Mr. Deputy Speaker (Sir Paul Dean): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts and Measures:

1. Consolidated Fund Act 1986
2. Agricultural Holdings Act 1986
3. Prevention of Oil Pollution Act 1986
4. Marriage (Wales) Act 1986
5. Greater London Council (General Powers) Act 1986
6. Bishops (Retirement) Measure
7. Ecclesiastical Fees Measure

Lothian Region (Edinburgh Western Relief Road) Order Confirmation Bill

Order for Third Reading read.

Lord James Douglas-Hamilton: I beg to move, That the Bill be now read the third time.
When I moved the Second Reading of the Bill on 4 December, I immediately mentioned that it was of the utmost importance to Scotland. It involves in no sense a minor local issue, and I shall say why.
The case for the western relief road has consistently been argued on the ground that it would make environmental improvements to living and shopping conditions on the western side of Edinburgh. That in turn would benefit public transport through the relief of traffic congestion and would reduce the incidence of accidents and personal injuries by the separation of vehicles from busy shopping centres, pedestrians and cyclists.
Over and above that the Bill is essential for Edinburgh. It would bring benefits in its relationship to planning policies now approved by my right hon. Friend the Secretary of State for Scotland in connection with the west side of the capital. Those planning policies refer to the construction of a conference centre in Lothian road, and the facilitation of the expansion and the development of Edinburgh's financial and banking centre in the Lothian road, Morrison street, Semple street, Fountainbridge area. I understand that at this moment discussions are going on between the district council and the Scottish Development Agency on that subject.
Those policies also relate to communications between these developments, the national motorway network and Edinburgh airport. The capacity to link the proposed developments of a financial and banking centre along with a conference centre connected by the relief road to the outer city bypass would mean that communications would be greatly improved. Connecting those developments with the main areas of population in central Scotland, and with roads and air communications throughout the United Kingdom would undoubtedly increase the employment potential of Edinburgh's role as a financial and banking centre.
The provision of a conference centre and purpose-built parking facility, the last of which has just been approved by my right hon. Friend the Secretary of State at the eastern extremity of the western relief road, will combine to support an initiative which has potential for the permanent creation of a very large number of jobs. Indeed, it is estimated that about 5,000 jobs would be created over a 10-year period in the development of financial services in Edinburgh.

Mr. George Foulkes: Such loose statements are always being thrown round, particularly by some Conservative Members. The hon. Gentleman just said that it had been "estimated" that about 5,000 jobs would be created. By whom? On what basis was the calculation made? We should be told. It is no good hon. Members making bland statements without producing any evidence for them. People will start to believe them just because they have been made. We need some hard facts.

Lord James Douglas-Hamilton: The Lothian region structure plan goes into the matter in detail. The hon.

Gentleman will find all the details that he wants in that plan. Moreover, the Edinburgh chamber of commerce passionately believes that thousands of jobs could be created. Of course the talks going on between the SDA and the district council are also very important.
I remind the House that financial services are a growth area in Scotland. The western relief road would enhance the attraction of Edinburgh as a financial and commercial centre for customers and investors. The gains in international terms would benefit not only Edinburgh but Scotland as a whole, so the Bill is wholeheartedly in Scotland's interests.

Mr. John Maxton: The hon. Gentleman has made great play about financial services, but surely people are no longer sent all over the world, and no longer travel between London and Edinburgh. Such work is increasingly done by computers. Why should we build a motorway?

Lord James-Douglas Hamilton: Edinburgh is a great insurance centre. Insurance companies in Edinburgh are undertaking more and more insurance contracts relating not just to Scotland and the North sea but to many parts of Europe and beyond. Edinburgh is increasingly seen throughout western Europe as a centre of financial services. That is all to the good. Indeed, it is seen by many people as the second centre after London.
The issue of jobs weighs more heavily in the immediate term. I note that the trade unions on the construction side support the Bill. All Scottish Members of Parliament will have received a letter dated 12 February from Mr. George Wilmhurst, construction trades co-ordinator of the Transport and General Workers Union for Scotland. He wrote:
My main concern is of course employment … The Edinburgh western relief road would provide approximately 1,500 jobs in the construction industry. It would, of course, have an effect on the plant hire industry and naturally there would be a huge quantity of building materials required.
Mr. Wilmhurst draws attention to the fact that the construction industry, which is labour-intensive, has suffered drastically, with a substantial reduction of those in employment over the past few years, stating:
This project would also provide training for a number of apprentices and Youth Training Scheme trainees.
In wanting the Edinburgh western relief road to go ahead, Mr. Wilmhurst is strongly supported by Mr. Fraser, the acting regional secretary of the Union of Construction, Allied Trades and Technicians, who wrote on 4 March:
I hereby confirm that our union agrees that this road should be given priority owing to the lack of work in the construction industry at present.
The unions are right to stress the importance of such employment opportunities, as they are important factors.

Mr. Foulkes: Surely the hon. Gentleman will agree that Opposition Members share the concern of the trade unions about the lack of employment opportunities not only in Edinburgh, but in the whole of Scotland. The hon. Gentleman and the unions will agree that exactly the same number of jobs would be created by the same amount of investment in a similar length of road in other parts of Scotland or, indeed, elsewhere in the Lothian region, or in other areas where it is desperately needed and where there are no objections to it—[Interruption.] Will the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) accept that, and will the hon. Member for Banff and Buchan (Mr. McQuarrie) shut up [Interruption.]

Mr. Deputy Speaker (Sir Paul Dean): Order.

Lord James Douglas-Hamilton: It is some time since the hon. Gentleman represented constituents in the east of Scotland. Thousands of Edinburgh residents passionately want this scheme to go ahead. The hon. Gentleman asked his question as if a parliamentary commission had not sat for three and a half months, and as if a Joint Committee of both Houses had not considered the matter fully. The parliamentary commission and the Joint Committee sat for longer on this Scottish Bill than any other parliamentary commission or Joint Committee has done this century.

Mr. Maxton: rose—

Lord James Douglas-Hamilton: I shall return to that matter later. If the hon. Gentleman feels that I have not dealt with the point adequately, he can intervene later. 
The primary purpose of the Bill is to relieve the shocking environmental conditions and improve road safety. At present large volumes of traffic are concentrated on the two principal radial routes from Edinburgh to the west: the A8 to Glasgow and the A71 to Lanarkshire. They are heavily overloaded with traffic. The A8, the main Glasgow road, passes through a series of major shopping centres, including those at Shandwick place, in Roseburn and in St. John's road, Corstorphine.
Similarly, the A71 passes through significant shopping centres on Dalry road and Gorgie road. Much of the road is narrow, congested and flanked by high density tenements and shops. More than 80,000 people live in the Edinburgh community served by those roads, and an even greater number use them for local services as shops are on both sides of the roads. Indeed, in the major shopping centres more than 1,000 pedestrians cross the roads every hour, in conflict with through traffic. There are schools either on the roads or in close proximity to them, and I receive representations from worried parents about the dangers to schoolchildren crossing them. They know that there are severe conflicts between through traffic, public transport, local traffic, shopping needs, pedestrians and school children. The consequences of that extremely unsatisfactory position are delays, frustration, danger and accidents. Each year there are about 3,000 accidents involving death or injury in west Edinburgh.

Mr. Michael J. Martin: The hon. Gentleman will know that while I was chairman of the inquiry I travelled daily to Edinburgh for more than three months. If the parked traffic at Corstorphine were cleared, access would be much easier.

Mr. Nicholas Fairbairn: Rubbish.

Mr. Martin: We are not considering what lies between the hon. and learned Gentleman's ears.
Is the hon. Gentleman aware that I could travel from my home in the north end of Glasgow to the Mound in Edinburgh in only 60 minutes? That is not an unreasonable length of time. If I could do it, any other driver should be able to.

Lord James Douglas-Hamilton: The environmental capacity of the road in Corstorphine is 6,000 cars per day, but every day 24,000 cars use it. The hon. Gentleman's suggestion about removing parked cars would not begin to have the desired effect. It is one of the most congested streets in Britain, and certainly in east Scotland. There is no cure for it other than to build the western relief road in conjunction with the outer-city bypass.
The outer-city bypass may slightly relieve the position in Corstorphine, but all the evidence shows that the conditions in Gorgie-Dalry will worsen substantially. Gorgie-Dalry is not an advantaged area. Part of Gorgie is in my constituency, and all the estimates are that the traffic using Gorgie road would increase after the opening of the outer-city bypass.
On Second Reading the hon. Member for Edinburgh, East (Mr. Strang) said of the western relief road:
I do not know how anyone can try to quantify the effect of that road on the number of accidents in that part of Edinburgh."—[Official Report, 4 December 1986; Vol. 88, c. 384.]
Since I did not have the opportunity to answer hint then, I should like to do so now. The relief road is essentially a bypass for the communities of Corstorphine, Stenhouse, Gorgie-Dalry, Sighthill and Murrayfield-Roseburn on the western side of Edinburgh. It will take through traffic, the origin or destination of which is the centre of Edinburgh, away from the routes that pass through the heart of communities with shopping centres, throbbing with activity, and with schools and countless homes. Instead, it will place the traffic on a purpose-built road with the same bridges and crossing points for pedestrians as are now in existence over or under the railway line. The problems of delay and safety in existing communities will be mitigated by the diversion of traffic to the proposed road.

Mr. Alex Fletcher: I have listened carefully to my hon. Friend. He will not have neglected the fact that the relief to Corstorphine and other parts of the western end of the city will have a direct impact on the centre of my constituency, which is why I have objected to the Bill. Everything piles up in the centre of the city. First, will my hon. Friend turn his attention to the constitutional issue? I understand his enthusiasm for the road, but I hope that he is not enthusiastic about the facts that no independent public inquiry was held, and that only two teams of politicians considered the justification for the plan.
Secondly, will he turn his mind to the question of expenses, which should be awarded to objectors, in addition to the parliamentary commission, members of which will receive two thirds of their expenses? I hope that my hon. Friend will support the suggestion that an amendment may be passed in the other place to give objectors two thirds of the expenses that they incurred in the Joint Committee.

Lord James Douglas-Hamilton: I shall deal with the question of expenses later.
The parliamentary commission considered whether the road would increase traffic in the city centre, but even the evidence provided by the objectors' expert witnesses admitted that the traffic in the city centre would not be substantially increased by the presence of the road. The technical advice was firmly to that effect, and that point was carefully examined.
It has been well established that dual carriageways have a much better accident record than single carriageways. That is because the central crash barriers greatly reduce the risk of accidents between overtaking vehicles. If the Bill is passed, huge benefits will accrue to pedestrians, regarding both the ease and safety of crossing roads, and more pleasant conditions on adjacent footways.
The relief road would reduce casualties by about 60 a year, and associated traffic management measures,


including the closure of residential streets, widening pavements and diverting traffic to the relief road, would reduce accidents by a further 60. In other words, the relief road and associated measures would reduce serious personal injury accidents, including some deaths, by about 120 a year. That is the overwhelming moral justification for the Bill. It will save lives and greatly reduce the serious injuries sustained in west Edinburgh.
Moreover, the western relief road will greatly enhance the quality of life for thousands of Edinburgh citizens. As I said, even the technical evidence of the objectors showed that the road would produce environmental benefits. They were prepared to argue only about the scale.
Throughout, the stated intention of the Bill's sponsors has been to improve safety and the environment, and not to speed traffic. The Bill will affect not only those who live along the A71 and A8, because at present congestion along those routes causes traffic to spill into adjacent side streets, extending the problem still further. Through traffic management methods, about 30,000 vehicles or more would be diverted from those congested streets, once the relief road was completed. Those measures would not be possible without it.
The noise level of the 1,800 dwellings along these roads is above that for which double glazing is considered necessary. The construction of the road, even without other supplementary measures, would improve the position for more than 1,000 dwellings. With associated traffic management measures, the figure would rise to about 2,500 dwellings. Moreover, they would produce important benefits for businesses and shopping centres.

Mr. Fairbairn: On the matter raised by the hon. Member for Edinburgh, Central (Mr. Fletcher)—[HON. MEMBERS: "Your hon. Friend."]—I thought that that was taken for granted, although after what the hon. Member for Glasgow, Springburn, (Mr. Martin) said, perhaps my hon. Friend would not want me to be one of his hon. Friends. Does my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) appreciate that the objectors conceded before the Committee of both Houses that there would be no increase in traffic in central Edinburgh? Secondly, before we consider the possibility of amendments about expenses, perhaps the House or the other place should consider what the law is. We are not competent to grant such expenses under the law. Therefore, hon. Members should not become too emotional about the matter.

Lord James Douglas-Hamilton: I am grateful to my hon. Friend. I shall deal with the question of expenses later. I do not accept what my hon. Friend said about the evidence of the experts employed by the objectors. Noise barriers will be erected, and should limit the impact of the new route, which is generally removed from existing residences. A small number of residences will be adversely affected, but that is far outweighed by the gain and the effect of the increases could be further mitigated by double glazing. About 20 houses need double glazing.
Atmospheric pollution will be minimised by the transfer of many slow-moving vehicles from confined spaces to a free-flowing road. The director of environmental health for Edinburgh district council is on record as supporting the proposal in the Bill. Benefits will be most significant in areas which give rise to most

concern, but the levels of pollution within the relief road corridor would be below those being experienced in St. Johns road, Corstorphine, and below the lowest threshold which would cause any concern.
The outer-city bypass is no cure to the problem. It would reduce traffic in Corstorphine by 20 to 25 per cent., but the traffic in Gorgie-Dalry and Stenhouse would actually increase, as will traffic generally south of the Edinburgh-Glasgow railway. On Gorgie road, the traffic flow will increase by 50 per cent., and on Dalry road by 70 per cent. Gorgie-Dalry is not a wealthy area, and the intolerable environmental effects ensuing from the building of the outer-city bypass underline the need for the relief road.

Mr. James Wallace: Will the proposal for the outer-city bypass increase through city traffic, or will it enable people, for example, from East Lothian or the Borders, who wish to get to Edinburgh airport to avoid more easily the city centre? If it does generate more traffic coming into the city, or at least traffic coming in at one point, does Lothian region propose any parking facilities to accommodate any such increases in full?

Lord James Douglas-Hamilton: The district council proposed building new parking facilities next to the Sheraton hotel, and recently my right hon. and learned Friend the Secretary of State gave approval. There will be 1,500 parking bays, but as cars use them for short periods they can accommodate several thousand cars a day. That deals effectively with one of the concerns which has been expressed about parking in the city centre.
Of course the outer city bypass is welcome in that it will remove from the city centre all traffic that can use the bypass, but it does have the problem that it will increase very substantially the traffic that comes into Gorgie-Dalry, especially if no relief road is built.
The net effect of the construction of the relief road will be to remove almost all the traffic from the residential areas south of the Edinburgh-Glasgow road and bring about a major reduction on the A71 road to Lanarkshire, while affording the potential to reduce traffic on that road principally to buses and local movement. The traffic on the A8 will be reduced to a quarter of its present level, and these improvements will be widely welcomed. There will be a marked improvement in bus services. The director of public transport supports the project and hopes that it will go through, because bus services would gain about three minutes on peak services. Each day there are about 2,500 bus journeys along the—

Mr. Barry Henderson: Will not the relief that will arise on the A8 coming in from Glasgow, in turn relieve the general pressure on traffic coming into Edinburgh from the Forth bridge direction? If some of the traffic opted to come in on the A8 route, and if there were less pressure on the road, would that not help traffic coming into Edinburgh from either the west or north?

Lord James Douglas-Hamilton: It would make certain that there would be much less worry about permanent traffic jams. Later, I shall come to the proposals of the Edinburgh district council for its £100 million plan for development which would cause a permanent traffic jam in Corstorphine. My hon. Friend says there is a permanent traffic jam in it at the moment.
If the plans of the Edinburgh district council go through, then 30,000 traffic units will pass every day through Corstorphine, traffic will be totally clogged up, and life will be absolutely intolerable for those who live in the west of the city.
There are 2,500 bus journeys along the A71 and A8 each day. Higher bus running speeds on existing roads after the construction of the relief road will increase the popularity of public transport, and have its importance in attracting new users. For all these reasons, the quality of life will be improved for countless Edinburgh citizens, causing this Bill to have such massive support.
The idea of the relief road is not new. The Abercrombie plan for Edinburgh in 1949 anticipated the development of such a road, and in the 1960s Professor Buchanan had his own proposals. The Edinburgh development plan of 1965 also made provision for a new radial road, a west approach road to the M8.
Professor Buchanan wanted a six-lane motorway, and, as a result of his proposals, there was the suggestion of an intermediate circular route. As an Edinburgh councillor, I voted against those proposals because I felt that they were too extreme and would have destroyed a great many houses. Throughout, I have taken the position that for any road proposal to go through, the houses must be respected and the roads must not take precedence over them. I believe that as strongly as possible. This proposal is infinitely more modest than that of Buchanan, and is of a scale intended to fit the city.
The Lothian region had such a plan which set out the regional authority's policies on these proposals and relief roads, which would fit in with the pattern of communications outlined. This provides for the outer-city bypass and the extension of the M8 from the west to that bypass. The relief road and the M8 extension are planned as part of a comprehensive package.
In December 1982, the Lothian regional council appointed consultants to carry out a study of the proposed construction for a western relief road. From that moment, the objectors to this proposal were treated very fairly. I went to see the consultants to impress on them that houses must not be destroyed in large numbers. My representations were not in vain. They agreed that any scheme involving the wholesale destruction of houses would be unacceptable. That is why they came forward with the ingenious scheme of moving the railway line to the north to safeguard 240 council houses.
In May 1983, the consultants reported back to the regional council and recommended that the relief road was justified in terms of environmental and traffic benefits, and that it should be built as a dual carriageway as soon as practicable, but it was not to be opened before the Sighthill section of the outer-city bypass. They recommended that the planning and design of the road should maximise environmental protection, including the construction of noise barriers and full landscape treatment. The scheme was to be undertaken in such a way as to secure the reorganisation or relocation of businesses without loss of employment. As far as possible, the loss of recreational facilities would be made good by the provision of alternative sites. Permanent environmental improvements with adjoining communities were to be secured by comprehensive planning and traffic management measures to give priority to local needs. In coming to these conclusions, the consultants conclusively rejected the no-road option.

Mr. Foulkes: The hon. Member was talking about moving the railway line into the strip of the Carrick Knowe golf course. Is the hon. Member aware that, as far as I understand it, this means that what is currently a straight railway line will have curves introduced? Since in other parts of Britain, in France, and all over the world, people are getting curves out of railway lines and making them straight, is this not a retrograde step? What explanation does the hon. Member have for this? Will that not discourage people from using the railway, and make congestion in Edinburgh even worse?

Lord James Douglas-Hamilton: British Rail has had every opportunity to make that point, but it has not objected and it did not participate in the parliamentary commission, as far as I know. That has not been a worry about which the parliamentary commissioners or the Joint Committee was concerned, and it is not a problem.

Mr. Martin: The hon. Member read the transcript of the hearing, and he will know that British Rail was worried, and that the counsel for the Cockburn association and other organisations, James Clyde, made the valid point that the inquiry should have given more consideration to the railway realignment than anything else, because that was the reason the order was introduced. Does he agree that little consideration was given to the railways, and that this was wrong?

Lord James Douglas-Hamilton: If British Rail were seriously anxious about this matter, I should have expected it to get in touch with me at some stage to voice that concern. It has not. I appreciate that the parliamentary commission was not unanimous, in that the decision was reached by three to one, but the overwhelming majority came to the view—

Mr. Foulkes: rose—

Lord James Douglas-Hamilton: I must proceed.

Mr. Martin: rose—

Lord James Douglas-Hamilton: The hon. Members will be getting their chance later and can develop their points then. I have much to say.

Mr. Foulkes: rose—

Mr. Martin: rose—

Mr. Deputy Speaker: Order. We cannot have three hon. Members on their feet at the same time.

Lord James Douglas-Hamilton: As I said, the consultant—

Mr. Martin: rose—

Lord James Douglas-Hamilton: I shall not give way.

Mr. Martin: Is the hon. Gentleman afraid to give way?

Lord James Douglas-Hamilton: The preposterous suggestion has been made by those appearing on behalf of the Edinburgh district council that the two roads worst affected by traffic congestion would be improved, in the sense of making it easier for traffic to drive through the communities concerned. Far from relieving the communities of the traffic with which they are desperately overloaded, this would further expose them to even more intolerable pressures.
Then there was the "wait for the outer-city bypass" school of thought. The consultants declined to test this, and the studies that they completed revealed that, while


there would be some relief in Corstorphine, the position would be much worse in Gorgie-Dalry. They foresaw that there would be more pressure to increase the capacity of the two radial routes, as an alternative to the western relief road. This additional capacity could be obtained only at the expense of the local community, whose members live, work, shop and go to school in those areas, by giving priority to traffic over them. They also saw that traffic using the main radial routes will continue to grow because of the increased levels of car ownership and because there are proposed developments on the western side of Edinburgh. Here, their words were strangely prophetic.
I have here the District Council News, which is produced on behalf of the Labour administration on the Edinburgh district council. It says that the Labour group is proposing a £100 million investment in the west of the city. It just so happens that this investment is perched at the western end of the proposed relief road in my constituency. The article says that the project, involving
200 acres of land at South Gyle will create a high technology park and a district shopping centre as well as several hundred houses. It is a joint development by Marks and Spencer, Associated Dairies, Wimpey Homes, with the cooperation and participation of the City of Edinburgh District Council.
The proposed shopping centre extends to 400,000 sq ft. This is larger than any shopping centre now in existence in Scotland. As well as that, 40 acres will be developed for housing with 123 acres as a high technology park in the green belt.
This application has been called in by the regional council, and if it is approved, 30,000 extra units of traffic will be using the roads every day. I do not need to tell the House that the effect of those proposals on west Edinburgh would be a permanent traffic jam of hideous proportions. The plans of Edinburgh district council, if implemented without amendment, would condemn thousands of my constituents to live in circumstances of frustration and degradation. Their lives would be adversely affected by the permanent traffic jam on their doorsteps.
The present environmental capacity of St. Johns road is 6,000, the existing traffic is nearly 24,000 and the bypass would reduce the figure marginally to 19,000. If these proposals go ahead without a relief road, there will be 30,000 extra units, and life will become intolerable, not only in Corstorphine but, even more so, in Gorgie-Dalry, where the traffic will, in any case, grow when the outer-city bypass opens. The environmental capacity of Gorgie road is 6,000 a day and more than 10,000 cars now use it. When the outer-city bypass opens, that number will increase to 15,000.
The Socialists on Edinburgh district council simply cannot have it both ways. They cannot say, "Yes, we want that £100 million development, but we do not want the western relief road." The mammoth developments that they propose—

Mr. Robin Cook: rose—

Lord James Douglas-Hamilton: I shall give way to the hon. Gentleman in a moment, because I know that he has a constituency interest. The mammoth developments proposed will be unacceptable, and if the council imposes them, they will bring misery and unbearable environmental conditions for my constituents.

Mr. Cook: I shall be gentle with the hon. Gentleman, because as he is aware, our views on the proposed development concur. The difficulty that he foresees will be avoided if Lothian regional council sticks by its strategic plan and recognises Livingston as the major shopping centre for the area. However, is not the hon. Gentleman also trying to have it both ways? He is supporting the road, but, as I understand it, is not in favour of the development.

Lord James Douglas-Hamilton: Before expressing a hard view on a £100 million development, which has many different facets, I shall take the views of my constituents into account. I have done that with the relief road, because many meetings have taken place, so I am aware of their concern. However, there is much concern about this proposed development because shopping patterns will be wiped out of existence and the changes will be far-reaching.
The hon. Gentleman expressed reservations about that £100 million development, but I know of no such reservations from the Edinburgh district council, which has published the article to which I refer, and which I can let him have if he would like it. If massive developments are proposed, with them there should be the improved environmental conditions that make life tolerable for those who live nearby and round about.
An exhibition was organised about the western relief road from 19 July to 3 September 1983. Some 40,000 households received leaflets explaining what the relief road would do. More than 3,000 persons visited the exhibition and the representations in writing that the consultants received showed that a decisive majority wanted the relief road to go through. During this process, I attended the meeting, and I and others urged the consultants to make changes.
An important one was the move to safeguard as much as possible the employment of those who work at Westfield. The consultants listened to the representations and substituted a viaduct through the Westfield area to minimise the impact on businesses in that area. It was made clear that the design standards are virtually the lowest for a dual carriageway road, the speed limit over much of that road being 40 miles an hour. The line of route takes amenity interests into account.
For the most part, the route will occupy vacant ground or utilise former railway land. Most of the route runs alongside the Edinburgh-Glasgow railway line. At one point, as mentioned, where the route would conflict with housing, the railway is diverted. The diversion of the railway, the construction of the viaduct and the presence of undeveloped or derelict land allows the whole project to proceed with the demolition of only one house. A satisfactory arrangement has been made with the householder concerned.
Although road proposals involve the loss of open space, allotments and part of the golf course, the regional council has agreed to relocate those facilities and there will be extensive landscaping. The facilities affected by the relief road will be replaced or improved.
There are safeguards in the Bill for allotment holders and there is a smaller loss of land, as was mentioned earlier, in relation to Carrick Knowe municipal golf course. The region has employed a golf course architect


who has prepared a design for remodelling the course on an 18-hole, par 70, basis of greater interest than the present course. That is covered by clause 35.
On Second Reading, the hon. Member for Edinburgh, East spoke about the importance of open space, although the same arguments apply to Portobello bypass in his constituency. That bypass, in the course of construction, which starts at Musselburgh and goes on to Portobello, goes through a disused coal mine, small shops and car parking adjacent to Asda, through allotments, through a garage and car showrooms, through former rail land, rail workshops, and wasteland, and will pass on an embankment behind houses in Portobello. In some ways, that bypass is even more intrusive than the western relief road, yet the hon. Member for Edinburgh, East is only too happy to support a relief road for his constituency.
Some of the land on which the western relief road will run has been used as an informal recreation area and in places it has been used for dumping. The land has always been reserved for a major motorway and the road does not take it all. The road proposed is not a motorway. It is proposed to lay out a football pitch on some of the remaining land as well as to relocate and landscape a children's play area. Amenity and recreational interests have been taken into account.
I should like to examine the procedures involved in this matter. The regional council used the procedure of a parliamentary commission. As it turned out, that has allowed a wider debate than would otherwise have occurred. The parliamentary commission was the longest which has ever sat and was chosen for three reasons. First, the region could be faced with three planning inquiries: on the planning aspects of the road; on land acquisition apart from the rail diversion; and on rail diversion and associated land acquisition. Secondly, the procedure allowed a guaranateed hearing into the whole proposal. Thirdly, it allowed for a rather wider range of compensation than would normally have been available. Some 39 amenity groups banded together for the inquiry. Witnesses from the smaller groups said that they had received a fair hearing.
A number of arguments were put forward at the commission by the district council, the Cockburn association and the Balgreen, Stenhouse and Whitson action group. They argued that the new road would increase city centre traffic. Extensive analysis demonstrated that the redistribution of existing traffic caused by the relief road would not have a significant effect on the city centre. The consultants' view was that there was no evidence that the modest scheme proposed would significantly alter the number of journeys—

Mr. Foulkes: What is the purpose of the relief road, then?

Lord James Douglas-Hamilton: The purpose of the road is to remove cars from a highly congested shopping centre, where there is considerable danger to the lives and welfare of children and those who live there and to remove those cars to a purpose-built road where they will not pose the threat that they now do.

Mr. Foulkes: On that particular point, which is crucial, will the hon. Gentleman give way?

Lord James Douglas-Hamilton: Other hon. Members want to speak, and I want to develop my point.
Lothian region intends to maintain a limit upon parking. That is an important factor which—

Mr. Foulkes: Will the hon. Member give way?

Lord James Douglas-Hamilton: This will be the last occasion that I will give way.

Mr. Foulkes: This is a crucial point. The hon. Gentleman's whole central point is that the Saughton road and the Gorgie-Dalry road traffic will all go on to the new relief road. The hon. Gentleman ought to know from his experience that as soon as traffic goes on to that relief road more traffic will come in to the Corstorphine road and the Gorgie-Dalry roads, as those roads are at present relatively empty. More traffic will come into the city centre, thus making the constituency of the hon. Member for Edinburgh, Central (Mr. Fletcher) more congested.

Lord James Douglas-Hamilton: I am grateful to the hon. Gentleman for raising that point, because he is fundamentally wrong. People come into the city centre only if they have the time and the money to do so. Whether the relief road is built or not will have no effect on the time or money of those who wish to travel to the city centre. The effect of the road is merely to redistribute traffic which already exists.
The road will not have the effects that the hon. Gentleman fears. If the hon. Member does not believe me, he should look at the big road into the heart of Sheffield, which has not increased traffic in that city centre. It has not had that feared and dreaded effect. Much of what the hon. Gentleman is saying represents a fear of the unknown. I am certain that the experts who produced the evidence know what they are talking about.
There are five points of relief where traffic wall be redistributed into the city centre: the Roseburn spur, Dundee street, Haymarket spur, Canning street and Lothian road. It must be remembered that with the parking facilities at the end of the road, it allows an opportunity for cars to get out of Edinburgh speedily without congesting the roads which we are concerned about.
I shall give a piece of evidence to the hon. Member for Carrick, Cumnock and Doon Valley, who is reluctant to accept what I am saying. When parts of the western approach road were opened, before and after studies showed that there was a drop in peak traffic on Lothian road. It was contended that more effective use of public transport with the outer-city bypass would make that road unnecessary. More effective public transport would be at the cost of demolishing houses and properties alongside the route and it has been identified that some properties would have to be destroyed in the Chesser. That would be totally unacceptable to those concerned.
The region has proposed rail improvements. With park-and-ride schemes, it has built a new railway station at Livingston and a station has been opened at South Gyle. Further stations will be opened on the Bathgate line, at Currie and at Wester Nailes. While these will help, they are not a substitute for the relief road. The parliamentary commission, as the House knows, decided by a majority to support the road project. The matter should be considered by the Joint Committee on the basis that justice should not only be done but seen to be done. Serious allegations have been made in the petitions which have been lodged before the House.
We are entitled to express gratitude to the two hon. Members who served on the parliamentary commission


—the hon. Member for Glasgow, Springburn (Mr. Martin) and the hon. Member for Strathkelvin and Bearsden (Mr. Hirst)—and to those hon. Members who served on the Joint Committee. Two of those hon. Members gave up three and a half months of their time and the other two gave up nearly seven weeks. That represents a considerable sacrifice, to make certain that the matter should be properly considered.
At almost the same time that the Joint Committee reported, the Secretary of State gave the go-ahead for the building of the multi-storey car park. That development will help speed up the construction of the international conference centre nearby and the development of a financial and banking centre. The car park is an important move in easing the city's severe parking problems by siphoning off several thousand cars.
I believe that the centre of the city is catered for in five different ways. First, the multi-storey car park will make a substantial difference. Secondly, the council's parking control methods should discourage long-stay parking. Thirdly, the railway halts providing park-and-ride facilities will encourage commuters to leave their cars outside the city. Fourthly, the traffic lights control system and the traffic management measures will operate to redistribute traffic as required when the relief road is built. Fifthly, the outer city bypass will take out of circulation in the city centre traffic which can use a bypass to the city.
My hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) referred to expenses for the objectors. I am sympathetic with the determined line he has pursued on their behalf, not least because I am a life member of the Cockburn association and the National Trust. I shall not go into the detail of the legal complexities, but I believe that, as a matter of general principle, the amenity groups should be entitled to participate in massive planning inquiries without sustaining punitive costs with no hope of reimbursement. The points they raised were fully considered. Although the parliamentary commissioners and the Joint Committee rejected their line of argument, it was right that they should be heard, because they voiced the concern of some of their members.
Although the costs of the regional council and the district council are matters for those authorities respectively, I believe that the costs of the Cockburn association should be viewed sympathetically by the regional council because the issues needed full consideration before a decision could be reached. I believe that generosity by the region would not be a great sacrifice by ratepayers. I believe that such payment is desirable and necessary, whatever the legal technicalities may be.
From where does the opposition to the relief road come? I have heard a rumour that it emanates from the hon. Member for Edinburgh, East. That is remarkable, because the hon. Gentleman is benefiting from the Portobello bypass, which is a relief road through his constituency. The objective of that bypass was to remove traffic from shopping and residential areas where the traffic volume was approximately half the traffic volume in the west of the city. The only difference between the hon. Gentleman's constituency and mine is that the need for relief is far greater in west Edinburgh because the traffic volume is infinitely greater than in east Edinburgh.
The hon. Member for Edinburgh, East, tries to deny to my constituents benefits for which he has fought on behalf

of his constituents. He supports a relief road for east Edinburgh, not for west Edinburgh. However, the hon. Gentleman's colleagues on Edinburgh district council, and perhaps the hon. Gentleman himself, are promoting a £100 million development in west Edinburgh. If development is to take place in the west, there must be roads with it to make life tolerable.
Traffic congestion in the western sector is totally unsatisfactory. Relief is vital for the areas where traffic is desperately overloaded. I hope that priority will be given to the local communities because, if the traffic is speeding, it can only be at their expense. None of the no-road options benefited those concerned. I strongly recommend the legislation.
The Bill is in the interests not only of my constituents but of Scotland. The environmental improvements, the accident reductions, the saving of lives and the benefits to public transport are all obvious, but the contribution of the western relief road to Scotland's economic well-being cannot be too strongly stressed. The people of Edinburgh make a great contribution to Scotland and to the United Kingdom as a whole. Edinburgh is one of the most beautiful cities in the world. Its educational system is second to none. Its banking, finance, insurance and commercial activities have a worldwide reputation. I believe that Edinburgh is well on the road to becoming the second financial centre of Europe after London.
The developments proposed by the Scottish Development Agency and the conference centre will establish a high-grade office development for financial institutions. At one end of the road is this proposed £100 million development; at the other end is the proposed development of a financial centre. Each proposed development will have the maximum impact only if there is a relief road. I have reservations about Edinburgh district council's proposal. However, I believe that it is essential to have this legislation because it stands for progress. It is essential for Edinburgh and Scotland.

Mr. Michael J. Martin: I mean no offence to the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), but I think that it was unfair of him, knowing that many hon. Members wanted to put their case, to take so long. The Conservative party's interest in Edinburgh was shown by the fact that only one Conservative Member was willing to speak. The hon. Gentleman had to keep the debate going until his colleagues—

Mr. Robin Cook: There are only four of them.

Mr. Martin: —managed to finish their meal at the Harcourt Grill. That was very sad. It does not say much for the Conservative party's attitude to Edinburgh.
I do not believe that we should discuss Edinburgh's planning requirements at this stage. Three and a half months should not have been spent in Edinburgh, away from the business of Parliament, dealing with this matter. I do not believe that the issue should have been dealt with by a Joint Committee. The House has created legislation allowing local authorities to take up these matters through planning inquiries. If local authorities felt that planning inquiries would not give objectors and supporters alike a proper voice, they should have made representations to the


House long ago. It is ridiculous to say that a parliamentary inquiry was needed because it would give ordinary people in Edinburgh the opportunity to state their case.
The hon. Member for Edinburgh, West confounded that argument when he told us that the Joint Committee rejected the proposal to cover the expenses of those who were good enough to make known their objections. The objectors reacted responsibly by creating an umbrella group of all objectors and allowing the Cockburn association to represent them, to appoint Queen's counsel and to make legal representation. It is wrong to say that this type of procedure makes things easy for the objectors. I believe that it makes it more difficult.
Anyone who spent any time at the Edinburgh inquiry would have seen that it was not easy for members of the public to make representations. They had to appear before six Queen's counsel and their juniors. I do not believe that it would have been easy for anyone to petition against the Bill.
The Government have a large majority. If they had had a very small majority, would they have allowed two Members of Parliament to go to Edinburgh?

Mr. Henderson: It would have depended on who they were.

Mr. Martin: The hon. Gentleman will know that the group must consist of an Opposition Member and a Government Member. If there were a Government with a small majority, a local authority opposed to the Government of the day could manipulate the parliamentary order and get people to object to it. The Government would be obliged to set up a parliamentary commission in Scotland. That would not be allowed. I am sure that the Leader of the House would bring about a change in legislation very rapidly.
As the only person who can represent constituents in Glasgow, Springburn, it is a scandal that I was taken away from the business of the House. I had a major redundancy declared in my constituency while the parliamentary inquiry was going on, and I was unable to come here to make representations on behalf of all the work force in the only major industry left in my constituency. That is not right. I do not mind the House taking a decision that I have to be elsewhere, but I take exception to a local authority making that decision when it had the power to go to a planning inquiry.
We were in Edinburgh to consider legislation. That is as it was explained to us by the two competent clerks, who were both qualified Queen's counsel. I think that Mr. Gavin Douglas is the Secretary of State for Scotland's legal adviser. We were advised from the outset, as parliamentary commissioners, that our main object was to look at the legislation to see whether it was properly worded and to make sure that it was not defective. We had to ensure that it would allow British Rail to divert the railway in such a way that no claim could be made against it, and that it was complying with the Railway Acts.
A submission was made at the early stages of the inquiry by James Clyde, now Lord James Clyde, a High Court Judge. His case was that we should throw out the order because there were other means at the disposal of the local authority and it should go back and prepare an order that consisted only of diverting the railway. Listening to the evidence, it was my view, and that of the legal advisers, that had that been done it would have taken only

weeks to get the thing through. We would not, as a result, be having this discussion tonight and valuable parliamentary time would not have been taken up. All that we would have discussed was the diversion of the railway. Evidence was led to the effect that to proceed with such a major road development by parliamentary order was unprecedented. No evidence was put forwarded that could stand up to scrutiny to show that such a development had ever been put through by way of parliamentary order.
It does not matter what the hon. Member for Edinburgh, West says about a dual carriageway—there are dual carriageways and dual carriageways. I live on a dual carriageway—Wallacewell road and Balornock. I invite the hon. Gentleman to come and see it. It bears absolutely no resemblance to this proposal. What we have before us is a proposal for a motorway without a hard shoulder. It is the equivalent of the Clydeside expressway, which is a lot different from the Wallacewell road.
Evidence was led by the proposer of the Bill, the regional authority, that what we are talking about is something similar to the Clydeside expressway. This is a motorway in every sense of the word except that it does not have a hard shoulder. No one in his right mind would attempt to cross the expressway on foot, because the traffic is so heavy. Indeed, the local authority has built bridges over it. There was never any parliamentary order to deal with that proposal, and the hon. Gentleman knows it.
The hon. Member for Edinburgh, West says that we on the Labour Benches have a fear of the unknown I think that I know as much about motorway proposals as any hon. Member. I lived in a community known as Anderston, where the Clydeside expressway is. That was a tight-knit community. There was a good strong community spirit which must exist in Corstorphine and other parts of Edinburgh. The Clydeside expressway cut across several streets in that community, with the result that the population in the Anderston district of Glasgow is less than a third of what it used to be in the 1950s, when I lived there as a boy. It did not help things when they put a motorway through the centre of Glasgow and pushed all the population to the outlying areas. Even though some people have moved away from their old districts, and have been away for over 30 years, they still come to Members of Parliament and councillors in Glasgow saying, "I want to go back to the old area that I used to belong to."

Mr. Henderson: Can the hon. Gentleman tell me the political complexion of the authority that allowed that development to go ahead? Can he honestly put his hand on his heart and say that the opportunities for the objectors from Anderston were any greater than were the opportunities for the objectors to this scheme? Is it not the case with this proposal that only one house is to he taken away, which was not the case in Anderston?

Mr. Martin: There were not many people in Anderston who could afford a QC and a junior to help them at a parliamentary inquiry. My point is that lessons should be learnt from Glasgow. We have deplorable housing in Glasgow, and many people said that these motorways would be the answer to all our problems, because the roads would bring more industry and relieve traffic. There are still parts of Glasgow where the traffic is very heavy. What is the answer?
The hon. Member for Edinburgh, West talked about experts. The experts, who were outside the city, told those


of us who live in Glasgow what we should be doing and what was good for us. Some of them stay in Edinburgh. The experts kept telling us that we needed more motorways. They had a plan to put a motorway through my area to bypass the district of Stepps. They plan to put a motorway from the end of Glasgow to link up with the M8. Perhaps the hon. Gentleman should take that into consideration. There will be more traffic brought on to the M8 and more traffic going on to the very road that he is proposing.
Even though these ideas about motorways in Glasgow came up in the early 1960s, and all the citizens were shown drawings and working models of what the place would look like, we still have many problems. These have been thrown up because the experts told us that this would be good for us. I say to the hon. Gentleman and the people of Edinburgh that they should not think that the only thing they will get is this relief road. Some other expert will come along and suggest adding another mile or two—"Why not do something else? Why not have a ring road?" The strange thing is that all that traffic on the relief road stops at the city centre. Therefore, someone will come up with the bright idea that it does not work, just as they came up with the bright idea in the 1980s, that despite all the motorway building more motorways were needed.
The upheaval in Glasgow has been scandalous. In Springburn, where I live, there were excellent properties which the experts told us would not be pulled down, yet the planning blight was so bad that they fell down. People pleaded with the authorities to pull buildings down. It is all right for the hon. Gentleman to say that not one building will be touched, but let us not kid ourselves. We have only to look at what happened in Glasgow and the problems of planning blight there. There is more noise than people expected. Communities are divided. People cannot get to the parks or schools. The lead from the petrol, the fumes and so on have eroded the quality of life. All those problems exist in Glasgow, not just in Anderston, but in Cowcaddens and the Gorbals.
The main problems, which were touched on by the hon. Gentleman, were the planning considerations. One of the justifications for motorways in Glasgow was that they would bring more industry to the city. If motorways bring industries to cities, Glasgow should be a boom town instead of having the worst unemployment problems in Europe. Therefore, that argument is confounded.
The parliamentary inquiry threw up another problem. Each and every one of us on that inquiry had no legal training—

Mr. Robin Cook: That may have been an advantage.

Mr. Martin: That may be, but we depended on the advice of Queen's counsel to the Secretary of State, who acted as our clerks. Let me put on record that they were excellent people to work with. I did not envy them their task. Like myself, they had other jobs to do, yet they worked hard to make sure that we were given every facility. On every occasion we received not just legal advice, but strong legal advice, that the legislation before us was defective. That advice was cast aside by the hon. Member for Strathkelvin and Bearsden (Mr. Hirst), who I regret is not in the Chamber, and the two other parliamentary inquiries. The advice of the best legal brains in Edinburgh was thrown aside like a rusty nail.
It was not known at the time, but that was why the first motion to be put before the commissioners after all the proceedings was mine, saying that in view of strong legal advice we should reject the parliamentary order. Needless to say, it was 3:1 against. However, I felt so strongly about the matter that it had to be put on the record. I mention it today because the hon. Member for Edinburgh, West said that there was a strong majority against. I remind the hon. Gentleman that two independent Queen's counsel advised us that we should have rejected the order.
The hon. Gentleman does not take into consideration the fact that after the order was approved in Edinburgh, against my wishes, the representatives of British Rail came to the House to seek amendments to that parliamentary order. Therefore, the parliamentary order that was put before to us in Edinburgh was different from that which was put before hon. Members in the Joint Committee and the Members of the House of Lords.

Mr. Ron Brown: Sharp practice.

Mr. Martin: I do not know whether it was sharp practice. I merely make the point that the amendments were made and it would be erroneous to suggest that what was agreed in Edinburgh was the same as what was being considered at the Joint Committee.
When the people who represented the opposers—the petitioners against—came before the commissioners, in some cases those who were giving evidence were treated rather high-handedly. It is on record, because there was a transcript of every day's proceedings. Some people who represented voluntary organisations gave evidence and some commissioners gave the impression that they had already made up their minds before they had heard them. There is no need to take my word for it, because the transcript shows that on a number of occasions I had to interject and ask commissioners not to treat witnesses in such a manner. Certainly it was my opinion that some commissioners had made up their minds before they had heard all the evidence.

Mr. Albert McQuarrie: Scurrilous.

Mr. Martin: That is true. I am certainly not referring to myself. Anyone who was there and heard the way that some witnesses were being ridiculed by the commissioners would have gained the impression that the commissioners had made up their minds.

Mr. McQuarrie: I apologise to the hon. Gentleman for having to leave, but I am expecting an important telephone call. Is the hon. Gentleman suggesting that the people who had made up their minds were Members of the House, or were they independent members of the panel? There were two independent members of the panel and two Members of the House. Is he suggesting that Members of the House had prejudged the commission's inquiries?

Mr. Martin: There was a report in The Scotsman in which it was mentioned that the hon. Member for Strathkelvin and Bearsden had said to Mr. Oliver Barrett, a member of the Cockburn Association, during a tea break or lunch break in St. Giles restaurant, "You will get your road whether you like it or not."

Lord James Douglas Hamilton: Is the hon. Gentleman aware that he is making a serious allegation, which is strongly disputed and rejected?

Mr. Martin: That is not an allegation that I am making against the hon. Member for Strathkelvin and Bearsden. That was the report in The Scotsman, which is a reputable newspaper, and it has not been retracted. I say only that there is a record to that effect. If the hon. Gentleman comes to the Chamber he will be able to put the matter right, but that was the allegation as it appeared in print, and I have seen no record of its being withdrawn.

Mr. Robin Cook: As Mr. Oliver Barrett is present in the Palace, would it not be a satisfactory way of disposing of this to summon him to the Bar to confirm what has been said?

Mr. Martin: I am not an expert on the procedure for getting members of the public to the Bar. However, at least Mr. Barrett would be able to set the record straight, as would the hon. Member for Strathkelvin and Bearsden.

Lord James Douglas-Hamilton: The hon. Gentleman has not produced the article from The Scotsman. My recollection of that article is that it did not mention Oliver Barrett quoting the hon. Member whom he has suggested. If the hon. Gentleman can produce the article, it might help us.

Mr. Martin: I can only go on my recollection, but I, certainly remember Mr. Oliver Barrett's name being mentioned. If I am wrong, I will withdraw the name of Mr. Oliver Barrett.
It is on record that members of the public who opposed the order were not treated in a way in which members of the public opposing an order should be treated. I had to interject on a number of occasions because of that. In fact, in his summing-up, Lord James Clyde asked the commissioners to remember that because they were dealing with voluntary organisations they should not treat them as cranks. I think he was giving a hint that that was the way in which they had been treated.
The other two commissioners did their job, and they did their best under the circumstances. However, some criticism should be levelled at the other place. I mean this as constructive criticism. It is my firm belief that, had there been other parliamentary commissioners from the other place, the order would not have had the stormy passage that it received. As I said, we were dealing with parliamentary legislation. If we had had two commissioners from the other place, we would have had people who had foremost in their minds the fact that parliamentary legislation is more important than anything else, and that would have been a primary consideration. Instead of that, we heard more evidence about the road than about the order, which is what we were there to look at.
On a motion, which I think was moved by the hon. Member for Strathkelvin and Bearsden, we said that we would leave aside Lord James Clyde's motion on whether Lothian should go back and prepare an order which included only the railway. In other words, we decided to leave it until we had some more evidence. That motion was carried, but we went on to hear all the evidence. Therefore, we did not even carry out the terms of the motion that we passed.
I have had differences of opinion with Lothian regional council about the road, and I made my views known to it in as fair a way as I could at the time. However, I want to put on record the fact that Lothian regional council was

responsible for looking after the parliamentary commissioners and that it did so in an excellent way. It looked after our needs for refreshments and coffee, which is important when one is conducting an inquiry over a period of three and a half months.
We had telephone facilities so that we could contact our secretaries, and we had typing facilities. The council looked after us in every way and answered our every request. Therefore, in spite of the fact that I was away from the House for three and a half months I made many friends in Edinburgh and on the Lothian regional council. I did not make friends just with Members of the Labour party, as the hon. Member for Banff and Buchan (Mr. McQuarrie) suggests. The hon. Gentleman knows that we had an excellent relationship with officials and elected Members from the Conservative party.
Although I have been in Edinburgh many times, I was impressed when I travelled up to the Mound, which is where the Lothian regional council buildings are, and where people live in the centre of Edinburgh. Old tenemental buildings which have been refurbished are to be seen cheek by jowl with some of the historic buildings of Edinburgh. Human beings live in Edinburgh after the office workers have left and the business is finished for the day.
That is what I remember about Glasgow as a boy before the motorways took over. Not only Glasgow but many other places are spending millions to get the population back into the city centre. I say to the people of Edinburgh and to hon. Members who represent Edinburgh that they should watch roadway proposals very carefully. Edinburgh has something worth cherishing, and it should be guarded, because if it is not the people of Edinburgh could lose one of their finest assets.

Mr. Albert McQuarrie: I am grateful for the opportunity to speak on this Bill because I served as one of the Members of this House on the Joint Committee.
I think that my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) has very lucidly set out the need for the Bill. As he said, it has been promoted by the Lothian regional council, and the main objectives of the order are set out in a statement issued by the promoters. The order was
(1) to authorise the council to construct a new road in the western sector of the city of Edinburgh which will bypass, and thereby relieve, residential and shopping areas suffering from traffic congestion;
(2) to divert a portion of the Edinburgh/Glasgow railway line in order to make room for the new road without demolishing a large number of local authority dwellings; and
(3) to acquire land for the above-mentioned purposes.
It was pointed out in the statement that the road would be approximately four miles in length. It would not be a motorway and would not form a part of the motorway network for the city, it would be a dual carriageway with low design criteria and its junctions would be roundabouts or controlled traffic lights. The statement also pointed out that the areas to be bypassed by the road were Corstorphine, Murrayfield, Roseburn, Sighthill, Stenhouse, Gorgie and Dairy and that those areas currently suffer from traffic congestion on the two main roads connecting central Edinburgh with central and western


Scotland. It also pointed out that over 80,000 people live in those areas and an even greater number rely on them for shopping or local services.
The statement said that the road would divert over 30,000 vehicles each day from existing congested roads and would give further opportunity to reduce the traffic problems by management and traffic restraint measures which would be impossible without a new road.
My hon. Friend the Member for Edinburgh, West said that the road would not generate new traffic because of the existing traffic restraint policy in the city. I think that he made that clear during his discussions. As the hon. Member for Glasgow, Springburn (Mr. Martin) said, the inquiry in Edinburgh lasted for 52 sitting days. The nature of the inquiry was certainly much broader than had been anticipated, as we heard from the comments made by the hon. Member for Springburn on Second Reading on 4 December. The hon. Gentleman went on to say that the commissioners had heard full and lengthy arguments for and against the road and found, by a majority, that the preamble to the order was proved. Therefore it came to the House.
On 4 December 1985 the Bill received its Second Reading. A number of hon. Members spoke during that debate. Much play was made of the fact that, if Conservative Members who were promoting the Lothian Region (Edinburgh Western Relief Road) Order Confirmation Bill would be prepared to refer it to a Joint Committee of both Houses, it would be looked upon with favour. It is worth drawing attention to what was said by those hon. Members who took part in the debate.
My hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) moved a motion, that Mr. Speaker felt inclined to accept, that the Bill should be committed to a Joint Committee of both Houses. That provided my hon. Friend the Member for Edinburgh, Central with the opportunity to put his case for referral to a Joint Committee. That is to be found in column 354 of the Official Report of 4 December 1985.
In column 364 of the Official Report, my hon. Friend the Member for Edinburgh, Central said:
I note what my hon. Friend said about the motion that I have on the Order Paper that the Bill should be committed to a Joint Committee of both Houses. I do not propose to enlarge upon that. If that were the decision of the House, it would allow further discussion on some of these matters.
The hon. Member for Springburn who, as he has just told us, was the chairman of the commission, agreed that a Joint Committee of both Houses should consider the matter. In column 367 of the Official Report he said:
I am glad the hon. Gentleman accepts that a Joint Committee of both Houses should consider this matter.

Mr. Martin: Will the hon. Gentleman accept that the reason that I asked for the matter to be looked at by a Joint Committee was in the context that hon. Members should not be taken away from the House for a long period? Does he agree that the Joint Committee agreed that this procedure should be reviewed in the light of what has happened?

Mr. McQuarrie: According to the Official Report, the hon. Gentleman did not make it clear that hon. Members should not be taken away from the House. To be fair to him, further down column 367 he said:
I could not come to the House for three and a half months".

That is the point that the hon. Gentleman was trying to make. However, he admitted that he was glad that a Joint Committee of both Houses would consider the matter.
On the Opposition Front Bench on that occasion was the hon. Member for Glasgow, Cathcart (Mr. Maxton). In column 371 of the Official Report he said:
However, if the Bill is passed, I warmly welcome the disclosure that the hon. Member for Edinburgh, West is prepared to accept the procedure of a Joint Committee of both Houses because at least that will allow the matter to be considered in more detail before the proposal is passed. Therefore, I ask my hon. Friends to weigh their decision carefully before they cast their votes."—[Official Report, 4 December 1985, Vol. 88, c. 364–71.]
There were also petitions to the House, including the humble petition of Edinburgh district council. It set out why the Bill should not receive a Second Reading. I shall not weary the House with the petition. A great deal was said about it during the debate on 4 December 1985. However, I wish to refer to page 7 of the petition, which says:
Your petitioners therefore humbly pray that your Hon. House may see fit to refer the confirming Bill to a Joint Committee of both Houses of Parliament and that the Order may not be allowed to pass into law and that they may be heard by themselves, their Counsel, Agents and witnesses in support of the allegations of this Petition against the Preamble to the Order".
My point is that Edinburgh district council also supported the setting up of a Joint Committee of both Houses of Parliament.
There was another set of objectors. There were 38 of them, including the Cockburn association. It prayed along similar lines to the prayer of the Edinburgh district council. Page 5 of the petition says:
Your petitioners therefore humbly pray that your Hon. House may see fit to refer the confirming Bill to a Joint Committee of both Houses of Parliament"—
[Interruption.] The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) was a member of the Lothian regional council. It is a pity that he was not a baillie. If he had been a baillie, he might have hanged himself with a chain—or perhaps it is fortunate that he did not, or we should have missed his windbagging from a sedentary position. However, he will not turn me from the point that I want to make.
In its wisdom, the House decided on 4 December to refer the Bill to a Joint Committee of both Houses of Parliament. In due course, a Joint Committee was set up. It included three hon. Members from this House and three Members from the other place. It sat for just over six weeks and listened to the presentation of cases from eminent counsel, professors, specialists, consultants and ordinary witnesses who put their views for and against the road. It heard representatives of Edinburgh district council. I resent the imputation of the hon. Member for Carrick, Cumnock and Doon Valley that no consideration was given to the matter.
The hon. Member for Springburn referred to The Scotsman. On 20 January 1986, under the heading "Row over choice of relief road 'jury'", it said:
The all-party parliamentary committee which is to provide the next hurdle for the Edinburgh Western Relief Road Confirmation Bill has been selected on a blatantly political basis, road objectors of all parties said yesterday.
It then referred to those who would possibly sit on Joint Committee.
Lord Ferrier was quoted as saying that he intended to appear before the Joint Committee and speak against the Bill in the House of Lords. He said of the appointments,


although they had not been made at that time, that they were nonsense and that he was going to complain to the Clerk of the Private Bill Office and ask what was going on. He said:
I think we are being taken for a ride.
I challenged Lord Ferrier during the Joint Committee proceedings. He said that he did not remember saying that to The Scotsman. He could not remember what he had said. I am not surprised, because he told us about his road building experiences in India.
That shows, however, that there was some bias in the press against the Joint Committee. The implication was that it would not do its job properly. I resent that implication. Had those who made these assertions been present during the Joint Committee deliberations, they would have found that we listened attentively to the cross-questioning of the witnesses.
We wanted to ascertain whether or not this western link road was essential.
One of the comments made by the noble Lord was to the effect that hon. Members of the Commons who were sitting on the Joint Committee should not have voted for the referral which Mr. Speaker in his wisdom joined to the Second Reading. I put it to the noble Lord and to the Committee that a Member of this House is considered to be an hon. Member and if an hon. Member is appointed to any Committee he must go in with a totally unbiased view.
The hon. Member for Springburn has left the Chamber, probably to go down to the Harcourt Room, a place to which he accused several of my hon. Friends of going. I am sorry he is not here to listen to what I have to say. He made an absolutely scurrilous attack upon my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst). That was an attack by imputation, because my hon. Friend the Member for Strathkelvin and Bearsden was the only Member of this House who was present at that inquiry.
If the hon. Member for Springburn was suggesting that an hon. Member made up his mind before the objectors were heard, the only Member he could have been referring to was my hon. Friend the Member for Strathkelvin and Bearsden. Knowing my hon. Friend as I do, I know he would not stoop to the sort of thing suggested by the hon. Member for Springburn. I resent the fact that the hon. Member for Springburn should act in such a way towards another hon. Member.
In the Joint Committee we studied the situation and listened attentively to the people who appeared before us. The inquiry in Edinburgh took three months and the people who were heard in Edinburgh were also heard—or their representatives, because all 38 people from the Cockburn association did not come here—by the Select Committee. All the professionals and consultants were heard and the paper filled a corner of the House of Commons Committee Room. We received miles of paper in the course of our deliberations. It was virtually a re-run of what took place in Edinburgh. Then there was a semi re-run of it down here.
The hon. Member for Edinburgh, East (Mr. Strang) is the only one who did not mention referring the Bill to the Joint Committee, because his speech was interrupted by my hon. Friend the Member for Edinburgh, West moving the closure. We do not know whether my hon. Friend the Member for Edinburgh, East supported the referral or whether he would have gone against it. That may be in his

favour or against him. I am worried about the massive expense of the inquiry to the ratepayers of Lothian and Edinburgh and the taxpayers in general.
The Bill then came down to the House for a Second Reading to which all Members agreed and sent it to the Joint Committee. The Joint Committee considered it over a period of six weeks at considerable expense; and now the hon. Member for Edinburgh, East objects to it. I am not suggesting that the hon. Member did anything irregular, but the will of this House was to refer it to the Joint Committee and Opposition Members said they were glad they would be given an opportunity to be seriously heard. They are doubting the integrity of the members of that Joint Committee of both Houses. That is a sad reflection of the Opposition. It is certainly no reflection on the members of the Joint Committee, who worked extremely hard. They were drawn from all parties and were not just Conservatives.

Mr. Maxton: Was it a unanimous report?

Mr. McQuarrie: It is not for me to tell the House whether it was or not. The deliberations of the Committee were in private. When the hon. Member for Glasgow, Springburn told the House something of the deliberations of the Committee, I did not bother to intervene and let him know the position because he should have known himself that deliberations are in private. Although leaks happen from time to time, they may be informed or ill informed. It is not for me to say whether there was a majority of one, two, three or four, or whether it was a unanimous decision.

Mr. Foulkes: We all know.

Mr. McQuarrie: The hon. Member for Carrick, Cumnock and Doon Valley, in his usual magician's way, thinks he knows the answer, but he knows very little about it.

Mr. Dennis Canavan: The hon. Gentleman talked about expense. Could he enlighten the House about who paid for the junket in Locket's restaurant to which hon. Members were invited by Tory councillor Brian Meeke to try to persuade them to vote for this road?

Mr. McQuarrie: I would not have said it was a junket. It was an informal presentation. I am sure hon. Members on both sides of the House go to informal presentations. It was not a junket.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. We are debating the Third Reading of the Bill, and hon. Members ought to get back to it.

Mr. McQuarrie: I trust I was not straying from the debate. I was merely trying to answer the question by the hon. Member for Falkirk, West (Mr. Canavan). However, I shall return to the debate. The Joint Committee ultimately reached a decision and found the preamble proved.

Mr. Maxton: It was not unanimous.

Mr. McQuarrie: It is all very well for the hon. Member for Cathcart to say from his sedentary position that it was not unanimous. That is for the hon. Member to speculate. There was nothing printed in the report to say whether or not it was unanimous. Someone might have said that there was a majority, but it is up to the Committee to decide. I will not be forced to digress from my speech,


because that is what the hon. Member for Carrick, Cumnock and Doon Valley was trying to do to my hon. Friend the Member for Edinburgh, West.
Having found the preamble proved, the Committee then had representations by opponents to the scheme. These were duly considered by the Committee and a decision made about them. Now the Bill has returned to the House.
Before I leave the matter of the deliberations of the Joint Committee, I should like to refer to what my hon. Friend the Member for Edinburgh, West said about expenses. As we know, in their wisdom the commissioners inserted into the Bill a provision that the Cockburn association objectors should be paid two thirds of their expenses. There seemed to be some difficulty about paying those expenses. First of all, Lothian regional council decided that, as the matter had been referred to the Joint Committee, it was still sub judice and the council could not pay the expenses at that time. There was a plea to the effect that, while two thirds of the expenses of the Edinburgh inquiry would be paid, there was to be no money to pay the Cockburn association expenses for the parliamentary inquiry through the Joint Committee. On that point I sympathise with the comments of my hon. Friend the Member for Edinburgh, West.
As my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) said, the Joint Committee deliberated upon that and found there was no legal way that the Committee could reach a decision on the expenses to be awarded to the appellants. It is fair to say that there was merit in the case made by the objectors for some payment of the expenses they had incurred. Like my hon. Friend the Member for Edinburgh, West, I hope that Lothian regional council will look at this matter sympathetically and see what can be done.
I disagree with what the hon. Member for Springburn, said about an ordinary person not having an opportunity to present himself at the public inquiry. That point was raised by hon. Members during the deliberations of the Joint Committee and it was clear that any ordinary person could have appeared at the public inquiry and made his case.
My hon. Friend the Member for Edinburgh, West referred to the fact that the Transport and General Workers Union had sent a letter asking for support for the passage of the western relief road Bill. My hon. Friend referred to the 1,500 jobs that would be created. The hon. Member for Carrick, Cumnock and Doon Valley said in an intervention that many roads could be built anywhere in Scotland without objection. From his experience in local government and his parliamentary experience, the hon. Gentleman knows that very few major roads are built in Scotland without objection and without a public inquiry.

Mr. Foulkes: rose—

Mr. McQuarrie: I am not giving way. The hon. Gentleman was trying to bring in a red herring.
The proposal has been examined by the Transport and General Workers Union, which sees the economic benefits and the benefit of a reduction in the number of accidents. It is invidious and ridiculous that Opposition Members, who talk continually about unemployment and the need to support the trade unions, should not accept what the Transport and General Workers Union puts forward. I may not be correct, but I think the hon. Member for Edinburgh, East is a sponsored Member of that union.

Mr. Gavin Strang: I want to set the record straight and to make it clear that the brother who wrote that letter did it on his individual initiative. Having spoken to the regional secretary of the Transport and General Workers Union in Scotland today, I can confirm that that is not the policy of that union. Hon. Members are free to quote the letter and to quote the points made in it, but it is not the policy of the Transport and General Workers Union.

Mr. McQuarrie: The hon. Member is suggesting that the letter from the Transport and General Workers Union, Transport house, 290 Bath Street, Glasgow, signed by George Wilmshurst, construction trades co-ordinator, is a lie.

Mr. Strang: No, I did not say that.

Mr. McQuarrie: He says that it is not the policy of the union, but the letter seeks support for the passing of the private Bill.

Mr. Michael Hirst: Is my hon. Friend aware that Mr. Wilmshurst does not qualify his letter in any way, and starts off by saying:
The Transport and General Workers' Union favours the building of the Edinburgh Western Relief Road"?
Does my hon. Friend find it bizarre that the union appears to have a spokesman who does not speak for it, according to the hon. Member for Edinburgh, East (Mr. Strang)?

Mr. McQuarrie: I am grateful to my hon. Friend for that comment. That is exactly how I see it. Trade unions do not write to Conservative Members seeking support for the passing of a Bill unless they are anxious to see that Bill passed. The hon. Member for Edinburgh, East wants to get his act together.
The Union of Construction, Allied Trades and Technicians also wrote on 4 March:
I herewith confirm that our Union agree that this road should be given priority owing to the lack of work in the Construction Industry at present. As you know my colleague from the T&amp;GWU listed various figures showing the unemployment situation in our industry.
In a further letter on 12 March, the same gentleman, Mr. A. Fraser, the acting regional secretary, said;
I, herewith, confirm that our Union agree that this road should be given priority owing to the lack of work in the Construction Industry at present. As you know my colleague from the T&amp;GWU listed various figures showing the unemployment situation in our industry. I trust we can count on your support in Parliament next Tuesday, 18th March, 1986.
The Federation of Civil Engineering Contractors also sought support for the passing of the Bill. It points out the problems faced by the construction industry. [HON. MEMBERS: "That is not a trade union."] It is a contractors trade union of which I was proud to be a member. It points out that 1,500 jobs would be created, but Opposition Members do not want those jobs in Edinburgh.

Mr. Maxton: It is disgraceful that the hon. Member, who has consistently supported the Government who have cut capital expenditure on schools, hospitals, road programmes, housing and everything else in Scotland, and who have created the unemployment in the construction industry, should now quote a trade union in his support.

Mr. McQuarrie: I shall not go down the road of the hon. Member for Cathcart. Obviously, he is ill-informed regarding cuts in hospitals, schools and so on. He wants to get his facts right. He should look back to the 1977 era of the Labour Government.
A document issued by the standing joint committee of the Royal Automobile Club, the Automobile Association and the Royal Scottish Automobile Club says that it
fully supports the concept of the proposed relief road. There is no doubt whatsoever that the road is urgently needed to enhance the amenity and environment of the area, to reduce injuries from road accidents and to improve traffic movement and access.
The Committee is aware of your agreement with these views, from your support for the measure at Second Reading, and hopes that you will make every endeavour to again vote in support of the Bill at the Third Reading.
Enough money has been wasted on the Bill in Edinburgh, in the House, on referral to the joint committee and again in the House tonight. I commend the Bill to the House. I hope hon. Members will do the honourable thing and vote for the Third Reading.

Mr. Robin Cook: I have a constituency interest in the matter, in that the proposed line of the road starts at the border between my constituency and that of the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). There is also within my constituency the entire length of the proposed M8 extension, which is intimately bound up with the future of the western relief road, and to which I shall return later.
I have a couple of other reasons for intervening in the debate. I think that I am the sole Member of the House who happens to be a resident of Corstorphine in the constituency of the hon. Member for Edinburgh, West, although I am unable to show him that I happen to be part of his slim majority.

Lord James Douglas-Hamilton: The hon. Member for Glasgow, Maryhill (Mr. Craigen) is as well.

Mr. Cook: Indeed. The hon. Gentleman is correct. My hon. Friend joins me in that distinction. We are two of those whom the hon. Member for Edinburgh, West, assures the House will be reduced to a life of frustration and degradation if the Bill does not receive its Third Reading. I assure the House that I shall attempt to face that future with as much philosophy as I can muster, and I shall seek to explain why I strongly believe that this is not a measure which should receive its Third Reading.

Lord James Douglas-Hamilton: Will the hon. Member accept that I was making that comment in the context of the £100 million development getting the go-ahead in the absence of the western relief road?

Mr. Cook: The solution to that problem is perfectly simple. It is that the £100 million development should not go ahead and, as the Member for Livingston, I have a perfectly clear case for saying that Lothian region, which is the promoter of the Bill, should stand by its own strategic plan, shut out that proposal and affirm Livingston as a major shopping centre for the western part of the Lothian. This would be entirely consistent with the policy of the promoters of the Bill.
My main reason for seeking to intervene is that for a decade I was the Member for Edinburgh, Central, where the western relief road terminates, and I have a considerable affection still for the centre of Edinburgh. I believe that the central community of Edinburgh represents one of the successful examples of a living community within a city centre. I can say that with some objectivity, since I was not born in Edinburgh, but in Bells hill, but I must admit that the centre of Edinburgh is considerably more elegant than the centre of Bells hill.
The reason why the centre of Edinburgh is so successful is that it retains a large body of people who are prepared, and want, to live there. I have to confess that I consider the centre slightly less civilised now that it returns a Conservative rather than a Labour Member of Parliament. I am surprised to note that the hon. Member for Edinburgh, Central (Mr. Fletcher), who replaced me as the representative of that constituency, has chosen to attend only the first half hour of this debate and has not been present for the last one and a half hours.
I would put it to the hon. Member for Edinburgh, Central, that he holds one of the few seats held by the Conservative party bang in the middle of a major city. The reason why this is possible is that Edinburgh is one of the few cities in which the middle class have still not moved out of the town centre, but seek to stay there because it is an attractive environment and a pleasant place in which to live. The overwhelming reason for Edinburgh being a pleasant place to live in is that it has not made the mistake of other cities by ringing its inner city and strangling it with urban motorways.
I must admit that this was an accident. The progressives who ruled Edinburgh in the 1960s had grandiose plans to build an urban motorway wherever they could find the space, and in many cases where they could not find the space. But the progressives, bless them, could never brace themselves to spend the money to build the motorway. Therefore, at a time when motorways were fashionable, none was built in Edinburgh. Since then, they have learnt from the mistakes of other cities—a fate that would have been theirs had those roads been built. We can see that fate in other cities. My hon. Friend the Member for Glasgow, Springburn (Mr. Martin) talked eloquently about the problems that arose around the motorways in Glasgow, and similar problems have occurred elsewhere in Scotland and, to an even greater extent, in England.
There is the example of the havoc created by these urban motorways in Carlisle, where the urban motorway that goes into the city centre is called the Georgian way. When, on my first visit to the Georgian way, I asked how it came by this curious title, because I could see no Georgian houses on either side, I was assured by the chairman of the planning committee that it had been named the Georgian way after the Georgian houses that had been pulled down to make way for the dual carriageway.
That is a mistake that Edinburgh has avoided, and the residents of the Edinburgh city centre have now come to realise that if they wish to preserve their community and their environment this can be done only by resisting every fresh attempt to drive a new road into the centre of the city. In my time as the hon. Member for Edinburgh, Central I had to resist a number of such proposals, including, most obviously, a clear parallel with the proposal before the House tonight, the British relief road. I would say to the hon. Member for Edinburgh, West, who paraded a number of arguments in favour of the western relief road—that it would relieve traffic on the city streets, that if it was not built those streets would become congested, that it would provide additional environmental measures without which the residents would be reduced to a life of frustration and degradation—that those same arguments were paraded a decade ago in support of the British relief road. But we stopped it because we were not convinced, and life on the south side of Edinburgh continues very much as it did 15 years ago before that proposal was mooted.
The reason why all those roads have been resisted is that any new road is likely to bring more traffic. More and bigger roads mean more and faster traffic. The hon. Member for Edinburgh, West attempted to make the case that the western relief road, uniquely in the history of dual carriageways, would not attract a single additional form of transport into the city centre. I do not believe that. One of my reasons is that, from experience as the Member for Livingston I am aware of the proposals for the M8 extension, which is designed to join the outer-city bypass at precisely the point at which the western relief road leaves it. That, in turn, is a variation on the original proposals which we debated 10 or 15 years ago, when we insisted that the M8 extension should meet the outer city bypass at a different point. Motorists did not then have the incentive to travel on into the centre of Edinburgh.
It is proposed that we should have a motorway system which enables one to drive from Greenock through Glasgow, on to the M8 to Newbridge, on to the M8 extension and the outer city bypass and then along the proposed western relief road until all that motorway traffic suddenly comes to a dead halt at a set of traffic lights stuck at the bottom of Lothian road. It makes no sense to connect the centre of Edinburgh with Glasgow along a dual carriageway system that suddenly terminates there.
The hon. Member for Edinburgh, West suggested that there might also be a car park for 1,500 cars. Lothian region has also proposed that, but it has never finalised its planning proposals. Lothian region asked the House for permission to spend £37 million on the western relief road, but it has never braced itself to spend the money on building a car park for 1,500 cars at the eastern end of the western relief road. So motorists will find not a car park, but just a set of traffic lights.
If traffic is encouraged to use the motorway system, the M8 extension, and thenthe western reliefroad, the volume of traffic focused on that point in the centre of Edinburgh will eventually oblige the planners to devise new ways of getting the traffic through the city centre and out the other side. If half a through road is built, the pressure of traffic will eventually oblige planners to think of building the other half of it.

Lord James Douglas-Hamilton: Is the hon. Gentleman aware that since my right hon. Friend the Secretary of State has approved the plans for that car park building, the region has given me to understand that it has every intention of going ahead with it?

Mr. Cook: I am informed that the region has hitherto been unable and unwilling to finance such a project, and is still looking for a promoter. The region's original position was that the district council should build the car park. That adds insult to injury.
What is proposed is a perverse conjunction. On the one hand, the region wishes to construct an outer-city bypass, but, on the other, that same highway authority proposes a through road to channel the traffic into the city centre. Logically speaking, both cannot be done at the same time. If the future of handling traffic coming from the west of the city lies in an outer-city bypass, that bypass should be given a chance to prove itself without having the experiment weakened by the construction of a road that will funnel traffic into the city centre.
The alternative requested by those in central Edinburgh is clear. It is an alternative that has been endorsed by the

residents of Gorgie-Dalry, to whom the hon. Member for Edinburgh, West referred with such touching concern. But as recently as last night the Gorgie-Dalry community council affirmed its opposition to the western relief road, because it does not believe the figures given by the hon. Gentleman for the relief that the western relief road will provide for Gorgie-Dalry. It believes—history proves it right—that if that new road is built there will be more traffic in the city centre, which will mean that the residents will see their environment deteriorate.
The alternative is to find methods of traffic management which, far from inducing more traffic to the city, will discourage and decrease it. That brings me to the curious position taken by the Bill's promoters. They say that if the road is built they can then undertake traffic management schemes to improve the environment in places such as Gorgie-Dalry. However, when the matter was considered in Committee, and whenever an amendment was tabled to insert traffic management schemes into the proposed Bill, it was resisted by the Bill's promoters. They believe that the road should be built first and traffic management schemes can then be tried. That is the wrong way round. We should first try traffic management schemes, which will cost only a fraction of the cost of the road, and if they fail the promoters can come back and make a case for an additional road to cope with additional traffic. Let us have traffic management proposals first, not last.

Mr. Fairbairn: The hon. Gentleman has not read any of the documents, far less the evidence. The traffic management schemes proposed by the promoters cannot take place unless the western relief road is built. On the contrary, the objectors, for whom the hon. Gentleman speaks, proposed not traffic management schemes but schemes which would enable even greater flows of traffic to pass through Gorgie-Dalry and Stenhouse and reach the centre of Edinburgh even more quickly, knocking down large amounts of property and destroying large numbers of jobs in the process. The hon. Gentleman should read the evidence.

Mr. Cook: My objection to the road does not oblige me to support every objection made to the Bill. My objection is that the measure will bring more traffic to the centre of Edinburgh. From my long acquaintance with central Edinburgh, I would be astonished if the Cockburn association committed itself to a proposition which would enable more traffic to reach the city centre. An obvious traffic management proposal which would obviate the need to build the road is to reduce the capacity of the city centre to absorb cars by reducing parking opportunities and by introducing great opportunities for public transport.
That brings me to the second option available to us. I am sponsored not by the Transport and General Workers' Union but by the National Union of Railwaymen. The Bill has one clear consequence. There will have to be a realignment of the main Edinburgh-Glasgow railway line. That realignment will involve considerable additional engineering works. British Rail, which is in a position to know, has calculated that for 18 months that additional work on engineering requirments will mean a five-minute delay on the Edinburgh-Glasgow service. I remind the House that the end result will be a two-minute advantage for motorists when the road is completed. If we are serious about discouraging people from travelling by car and about


generating the sort of impact on the city centre to which I have referred, it is ludicrous to propose a measure which will make rail less attractive compared with the competing mode of transport by car.

Mr. McQuarrie: The hon. Gentleman should get his facts right. As my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) said, at no time has it been accepted that there will be an 18-month delay. Evidence to the Joint Committee varied from 12 to 18 months, and it was admitted that it would be the responsibility of the contractor, once the contract was let, to decide how he would carry out the work involved, for example in Balgreen road. There may be no delay.

Mr. Cook: I am perfectly happy to split the differance with the hon. Gentleman and compromise on 15 months. My confidence that it will be the lower rather than the higher figure is not enhanced by his submission that the contractor will decide how the work will be done. It is perfectly clear from the eviidence provided by the district council to every hon. Member that there will be considerable additional engineering requirements for building the railway line and that this cannot be achieved without disruption the rail services for perhaps more than a year.
On Monday, there will be an historic achievement in Midlothian, because on that day the Bathgate line is to be opened up to passenger traffic once again. I give credit where it is due. The former Secretary of State was extremely sympathetic to this proposal when I and my hon. Friend the Member for Linlithgow (Mr. Dalyell) went to him with it, and throughout the past two years he has been supportive of the case for re-opening the Bathgate line to passenger traffic.
If the hon. Member for Banff and Buchan (Mr. McQuarrie) cares to delve back in history, he will find that it was not a particularly sensible proposal, nor very clever planning, to close the Bathgate line in the same year that a new town was designated—Livingston—slap bang on the line that was being closed to passenger traffic. We are undoing that damage of 20 years ago, and as from Monday passengers will be able to travel that line and the passenger service will be restored.
I do not disagree with the hon. Member for Edinburgh, West when he says that restoring the Bathgate line will have a moderately modest impact on the number of cars travelling into west Edinburgh. There is another way in which, now that passenger traffic is being restored and that line has been upgraded, it can make much more than a modest impact on traffic coming along the A8 into the Corstorphine end of Edinburgh. If we were to take the opportunity provided for us to supply a park-and-ride facility at Newbridge, we could make inroads into the number of car-borne people coming into the centre of Edinburgh by providing for them a public transport facility at far less cost than it would require to construct the road to get them into the city centre in their cars.
This is a highly contentious measure. There was a suggestion earlier that within the Joint Committee the divisions were entirely on party political lines, but the hon. Gentleman declined to confirm whether or not that was so.

Mr. McQuarrie: Nonsense.

Mr. Cook: If the hon. Member will let me finish my sentence, he might find that he is committing himself with

undue haste. It is certainly the case that in the Lothian regional council and the Edinburgh district council the divisions have been on party lines. In Lothian region, because of the extremely tight party political balance, frequently this major proposal has been given approval on the basis of the casting vote of the chairman of the committee. The proposal is contentious, with a very narrow basis of political support within the regional council itself, and it is now proposed that this measure be approved on Third Reading tonight.
We understand that Lothian region is standing by ready to let the first contracts immediately. Why the haste? On 4 May that political balance will alter. There can be no doubt about that.
The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) may laugh, but if he seriously expects that the Conservative party will emerge with the same number of regional councillors in Lothian on 8 May, his optimism exceeds the views of any known Conservative Member of Lothian region. That balance will change. There will no longer be a majority on that council for this proposal.
I would regard it as highly improper if Lothian region, while it still has that casting vote majority, committed the ratepayers and residents of Lothian region to this major project in its dying days. If there is the slightest suspicion that Lothian region is prepared to take that improper step, I believe that the House would be wise to make sure that it does not grant it permission to do so.
The House and Lothian region would be well advised to delay any start on this project until we have the opportunity to consider the impact of the outer city bypass on traffic coming into the city centre, and until we have the opportunity to determine whether the figures quoted by the hon. Member for Edinburgh, West are correct—an opportunity which will arise only next year. Given the imminence of the opportunity to put to the test the figures that the hon. Gentleman quoted, I believe that there can be no case for the House giving the Bill a Third Reading at this time.

Mr. Nicholas Fairbairn: I listened with interest to the remarks of the hon. Member for Livingston (Mr. Cook). As one of those who serve on the Joint Committee, of both Houses, I shall address my self to the priority of the mechanism used to consider this matter. Although a Joint Committee has only once been used for a Scottish Bill, it has frequently been proposed as the correct mechanism. The advice of the Chairman of Ways and Means and the Lord Advocate on all those occasions has been that the procedure was inappropriate and should not be adopted unless certain fundamental characteristics were fulfilled.
In 1920, the Chairman of Ways and Means, Mr. Whitley, said:
I should have taken objection to the Motion to refer the matter to a Joint Committee of the two Houses. I say that because I think it my duty to straighten the hands of the Commissioners who conduct the inquiries into this matter. I hold very strongly that it is the duty of petitioners to bring their case before the tribunal in Scotland, and that this House ought not to consider any revision of the decision of those Commissioners if the petitioners have failed to put their case before the Commissioners sitting in Scotland, and in no case to allow a review of those decisions unless some wholly new facts have arisen."—[Official Report, 3 December 1920: Vol. 135. c. 1610.]
That was confirmed by the Member of Parliament for Edinburgh, East (Mr. John Wheatley), who said:
the House would be slow to give effect to any such Motion unless they were satisfied, prima facie, on the case presented that some large and important constitutional issue was raised, or that some material miscarriage of justice had been effected; and that they would not sanction the repetition of the previous procedure and a rehearing of the case unless conditions such as I have indicated were satisfied."—[Official Report, 20 July 1950; Vol. 477, c. 2568.]
In this case, the matter was agreed, as I understand it. Therefore, quite inappropriately, the matter was referred to a commission of both Houses with an apparent open brief to reconduct the inquiry of the parliamentary commissioner. That was wrong and an abuse of the process that should never happen again. I say these things because it is as if the requirements on the Joint Committee, which are essentially the requirements and functions of an appeal court, were in some way dissolved by the agreement between the two sides that it should be referred to them.
It is as if, in an appeal court, the fact that leave to appeal had been granted removed from the appeal court the restriction of its function. We know what the functions of the appeal courts are. The fact that any Committee of both Houses has those limited functions was stated by the Chairman of Ways and Means in 1920, was restated by the Lord Advocate in 1948 and since that time has frequently been stated when attempts have been made to refer Scottish Bills to such a Committee.
I cannot complain that the Committee had to undergo a complete retrial of the position. It is important for the future that rulings should be made by the Chair and by the Clerks that, where it is agreed or not agreed that a matter on a Scottish Bill should be remitted to a Joint Committee of both Houses, the writ of the Committee runs only to investigate new circumstances, constitutional impropriety or other such matters as I have read in the judgments given to the House.
I asked those acting on behalf of the petitioners against the Bill if they had any such grounds, if there was any new position, if there had been constitutional impropriety or if there was any reason whereby they could sustain the fundamental requirements set out in the opinion of the Chairman of Ways and Means in 1920 and the Lord Advocate in 1948, and I was told that there was none.
At the conclusion of the evidence, I again asked whether a single fact had been brought before us which had not been brought before the commissioners in the original 5-day inquiry and I was told that there was none. It seemed that it would be quite improper for those sitting in judgment in the Committee of both Houses to interfere with the judgment of parliamentary commissioners properly constituted, without a reason or fact being shown as to why we should do that. Fundamentally, the whole process is wrong and I trust that it will never be repeated unless such objections are properly raised and argued.
I should now like to examine the merits of the matter assuming that we have the right to consider them afresh—in the same way that Wimbledon should be replayed as McEnroe was irritated because he lost the first time round. The evidence for the promoters presented before the House was clear, substantivly argued and undented by cross-examination or by any evidence by the petitioners against it. It was backed by facts which were not contradicted but were conceded by the petitioners against the issue. There was a fundamental difficulty in that the promoters had set an objective which was to relieve the communities of Gorgie,

Dalry, Stenhouse, Roseburn, Corstosphine and Murrayfield and that part of Edinburgh, by preventing the traffic from affecting the residents there. It is all very well for the hon. Member for Livingston, in his grand, compassionate, Socialist way, to say that that is fine for the residents and that if they did not like 24,000 cars rolling past their houses they would not live there and that if they did not like their children being knocked over on pedestrian crossings they would move. That is a fundamentally objectionable argument.
The promoters and their advisers addressed themselves to the problem of removing traffic from the communities in the areas of heavy traffic flow. They discovered that they could do that. I find it fundamentally impressive that the promoters commenced by telling their clients that they were not arguing whether the western relief road was a good idea; rather, they wanted to examine all the options. They wanted to look not just at the no-road option but at all the alternatives before deciding. They came up with the answer that it was an astonishing idea on environmental, cost, humane and noise grounds.

Mr. Maxton: Does the hon. and learned Gentleman really want a mile-and-a-half traffic jam every morning?

Mr. Fairbairn: The hon. Gentleman does not know the position. I know it better than he does. I have done more to preserve Edinburgh and to prevent inner road traffic jams than the hon. Gentleman has dreamt of.
I was equally impressed, in the reverse direction, by the letter by the so-called experts who accepted their remit. Even before the experts considered the proposal, they said, "We agree that we shall mount arguments against the western relief road." In other words, they said, "We are willing to accept our fee to argue the case against the road." That was similar to a surgeon saying, "I agree to recommend the amputation of the legs. Perhaps you will send me the patient later. Please include the fee." That sort of partiality was distinguished from the impartiality of the promoters' adivisers.
I am a life member of the Cockburn association and the National Trust and one of the founders of many of the preservation societies in Edinburgh. I am president of the Duddingston Preservation Society, in the constituency of the hon. Member for Edinburgh, East (Mr. Strang). No one should think that I do not accept that Edinburgh should be preserved.
The hon. Member for Livingston confused the insanity of the Abercrombie plan, the Buchanan plan and anything to do with Sir Robert Matthew, Percy Johnson-Marshall, Mr. Riach and Basil Spence, who built Coventry cathedral. Those people proposed a wonderful future for Edinburgh which would be achieved by knocking down buildings and building roads in their honour and by knocking down the beautiful buildings on Princes street and putting pedestrians on one level and cars on the other—all those theoretical architectural madnesses.
I have a confession to make, and I am sorry that the hon. Member for Livingston is not here to hear it. When I was standing for the seat of Edinburgh, Central, I suggested in my election manifesto that Edinburgh's great salvation would be achieved if the inner and outer railways were turned into roads. They have no shops, no pedestrians, no schools and no frontages. They disturb no one. They are like arteries which travel through the body without making the slightest impact.
In the end, there was only one argument against the road—that it would introduce more traffic to central


Edinburgh. The hon. Member for Livingston presented, rather feebly, the argument that this was half a through route and that, eventually, one would be bound to build the other half. It is not half a through route—the route takes traffic that would travel anyway to its destination in the centre of Edinburgh. The bypass will take traffic away from communities.
We hear people talking about inner cities. I wish that they would come to Scotland to see them. The glory of Edinburgh and of other Scottish cities is that people live in the centre. In Edinburgh they live in Tollcross, Gorgie-Dalry, Morrison street, the Lothian road, and the new town. The whole centre is inhabited and that is the glory of our inner cities.
This road will take into an artery—as Lenin was put in a sealed coach—

Mr. Don Dixon: John Lennon?

Mr. Fairbairn: I know that the hon. Member has prejudices, but I did not know that he could not spell. The artery road is a corridor. It knocks down one house and does not affect any community on the way. It relieves the great communities of Gorgie-Dalry and Stenhouse of the traffic which presently reduces the quality of their lives.
It is all very well for the hon. Member for Livingston to say, "They wouldn't live there if they didn't have it." They would much rather live there if they did not have the traffic. I am one of the most committed preservationists and one of those most dedicated to the fabric and glories of Edinburgh.

Mr. Strang: I acknowledge that to some extent. The hon. and learned Member has been on the side of the people of Edinburgh who have opposed these grandiose plans for roads which would destroy the city. How can he explain the fact that the Cockburn association, which he supports, is one of the organisations which, with the National Trust for Scotland, has opposed this road. Yet both of these organisations are on the other side of the argument.

Mr. Fairbairn: The associations did not consult their life members, of whom I am one, and I am not very impressed by the fact that, allegedly, the Cockburn association is against it. We have evidence from the Cockburn association and from Mr. Pinkerton, QC, whose evidence is not only unreliable but is simply untruthful, self-interested and swingeing. We have evidence from a doctor who said that he did not want his way of life to be altered. He said that he had a private parking space in Murray place and that he went to the Royal Infirmary and to the Western General and that he did not want a lot of traffic getting in his way. Therefore, I found the "impartial" evidence of the Cockburn association very different from the concepts for which I joined it as one of its first life members.
I found the evidence of the Labour councillor for Gorgie-Dalry, and the lady who lived in Tollcross, Mrs. Pamela Scott, very impressive. Their evidence was sincere and genuine. What I found odd about the evidence they gave was that they were willing to commit their residents to the horror of the new spur which they wanted to see at Morrison street. It would create infinitely worse environmental conditions.
Apart from anything else, about a third of a million trees would be added to Edinburgh—a great new line.

The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) said that houses would need double glazing. Obviously he has not seen them. They already have double boarding. Not one is occupied.
Therefore, I regard all these complaints as false. If we must have an arterial road, I have never seen a scheme more civilised, more sensible and more safe, which will cause greater good and less inconvenience to anyone, than this arterial road. It will do nothing but improve the excellence of Edinburgh. For those who believe in public transport, it will improve and cheapen bus travel in Edinburgh. But it will not have a great effect on rail travel, about which the hon. Member for Livingston spoke, because about 5,000 acres of parking space would be needed if there was to be any effect on what I understand is called drive and ride when one leaves one's car at the station, and kiss and ride when one leaves one's wife and she takes the car. That was the evidence before the Committee.

Mr. Wallace: I am sorry to interrupt the hon. Gentleman's clear presentation of his case, but it has been represented in one of the documents that we have had that one of the technical witnesses on behalf of one of the amenity groups conceded that the new road would not generate any traffic. Can he confirm that that concession was made?

Mr. Fairbairn: It was conceded not only by the witnesses but by counsel for the Cockburn association, for 38 amenity societies, for the National Trust and for the petitioners against the Edinburgh district council that there was no evidence that it would generate a single new car. That is an obvious fact. If one takes one's car to Edinburgh and cannot park it, one cannot use it.
One of the pieces of evidence that I found most hypocritical was that the Edinburgh district council will have to ask for planning permission for a hypermarket at the western end of the road with 5,000 car parking spaces. In other words, 5,000 cars will travel through Corstorphine, Gorgie-Dalry and Stenhouse in order to shop. That seems to me to be the ultimate hypocrisy.
This is one of the most civilised arterial roads that has ever been planned in a major city, the fabric of which must never be threatened.

Mr. Ron Brown: In the House and elsewhere we hear trendy words such as infrastructure. I am sure that planners, architects and even some Tory Members might use that term, but for the average man and woman in the street it is like hiatus hernia or even perhaps a terminal illness. The so-called western relief road it means many things to many people. All sorts of experts can go before committees, as we have heard tonight, but in my part of the world, in Leith and Muirhouse, we see monuments to such people in the form of concrete tunnels and high-rise flats which are disasters. Yet those individuals who are called experts are applauded when they are mentioned in the Chamber. That is a sad fact, but it happens.
From time to time councils do get it right. Sometimes they get it left, as they did back in the early 1970s when the Buchanan report was rejected. That was a plan which would have brought more and more traffic into the centre of Edinburgh. The councillors, most of whom were


Tories, realised that more traffic meant less amenity, less city and more urban problems, especially parking problems. We must appreciate that today the situation is even worse.
The Transport and General Workers Union and the Union of Communication, Allied Trades and Technicians have suggested that jobs are involved. I do not doubt that. It is interesting that the two letters that have been circulated come from two bureaucrats in Glasgow who by no means understand the Edinburgh position. I say "two bureaucrats" because yesterday I attended a meeting of rank and file members of UCATT and they disowned a letter issued by Mr. Fraser of that union. I trust the rank and file more than I trust the officials, and I speak from experience. To take the argument to its logical and obvious conclusion, we can get jobs and create work by building Trident or gas chambers. That is not my argument. The rank and file must be heard in this place. They are arguing that the outer-city bypass be completed. Once that is done, we can judge whether the so-called relief road is necessary.
It is a question of first things first—a matter of priorities and using money wisely. This Government talk about doing this properly. We heard the Chancellor earlier today pontificating about this, that and the other. If the Government want to argue like that in Edinburgh, they must do so with people who have to endure many hardships.
Not everyone in the Tory party agrees with this proposal. Certain hon. Members, one in particular, have been vociferous in speaking against the proposal. The hon. Member for Edinburgh, Central (Mr. Fletcher) should know, because he represents the city centre. The Government do offer a choice. They say to the working class, "Take it or leave it." That is what they are saying to the working class in Edinburgh.
We know that some people will go into the city to use this road, assuming that it goes ahead. They will shoot in there in their grand Jaguar cars, coming in from Edinburgh airport. They like that, being picked up by the chauffeur and being driven away. But that situation will change soon because of the regional elections. They will be a disaster area for the Tories in Scotland. The majority of Scots will vote against the Tories and their allies, the alliance.
The Government hope to slip this measure through so that they can stick a parliamentary order on the Labour group, but the people of Scotland recognise these tricks. There are no arguments from the Government about whether the road is necessary. It is not necessary unless it is suggested—

Dr. John Marek: rose in his place and claimed to move, That the Question be now put; but MR. DEPUTY SPEAKER withheld his assent and declined then to put that Question.

Mr. Brown: We know that the civil engineers have been vociferous, because it is good for business and good for them. However, what is good for the Tories is not necessarily good for Scotland, and what is good for Edinburgh may not necessarily be good for Leith. If traffic comes into the centre of Edinburgh it has to go somewhere. It is rather like a leaking pipe. The water has to trickle out somewhere. All this traffic will trickle through into Leith, creating problems for the people there.

That will create more and more problems for the population of Leith. Ferry road in Leith is bedevilled by all kinds of traffic problems. Those problems will be increased. In no way will Leith accept the problems created by Edinburgh.
Leith is very important. The people of Leith have suffered because, willy-nilly, when we speak about Edinburgh we forget about the port. That is the most important place in Scotland. I do not suggest, however, that if funds are available they should not be used for investment in public transport or in traffic control measures that will improve the flow of vehicles around and through the city. Obvious problems should be tackled without throwing money at them. The Tories say that money should not be thrown at a problem, but that is precisely what they have done on this occasion for party political reasons.
The Tories will say that the case against this road has been worked up by the extremists—for example, the Cockburn association and the National Trust for Scotland. They have been denounced this evening by Conservative Members. They are bourgeois organisations and not very trendy, but they are aware of the consequences that will flow from the construction of this road.
To whom does one turn for advice? Does one go to the city council? Does one go to the Lord Provost? John McKay is a moderate, reasonable individual who would explain the views of the citizens of Edinburgh. I am sure that he has written to most hon. Members and explained exactly what should be done. I shall take this opportunity to refer to some of the points that he made. They need to be repeated for the record. He said:
1. The proposal to construct a Western Relief Road is premature. It should be shelved until the effects of the Outer City Bypass, which is scheduled for completion in 1990, are known. The new Bypass could well alleviate problems of congestion in the Western sector of the City and remove the need for a Western Relief Road.
2. A Western Relief Road would be contrary to the objectives of the Lothian Region's Structure Plan in relation to the reduction of traffic in central Edinburgh. The new road would probably increase the amount of traffic coming into the City.
3. The scale of environmental relief forecast by Lothian Region has been over-estimated. The little, if any, environmental benefit which will arise will not justify the early construction of the Road and residential locations to adjacent to the Road will suffer badly.
4. Any increased traffic volumes produced by the new Road will have an adverse effect on communities in central Edinburgh, including Lothian Road, Scotland" cross and the historic New Town.
5. Lothian Region have not given full consideration to what are called 'No Road' options. Little, if any, thought has been given to alternatives such as traffic management measures, junction improvements, marginal road alignments and the introduction of long-stay parking restraint measures.
6. The new road would involve the loss of valuable recreation and amenity ground and undoubtedly create environmental problems through noise and pollution. Whilst Lothian Region have carried out certain economic and environmental proposals it has been demonstrated that the benefits have been overstated and certainly do not justify expenditure of some £37 million at current prices.
It is felt that expenditure of this magnitude could be directed to more pressing and deserving causes, such as education, social work and health services.
7. Environmental and local pressure groups are firmly opposed to the proposals and such bodies include the Cockburn Association (The Edinburgh Civic Trust) and the National Trust for Scotland.
In his own simple way the Lord Provost of Edinburgh has told the Government, "Get on your bike." Anyone


riding a bike in Edinburgh would understand the traffic problems there. Certainly there are ways and means of forcing through an unpopular measure, but that will go down badly at the next regional election and the Government must be prepared to accept that they will have little representation on the regional council in Edinburgh.
Some hon. Members seem to think that this issue does not matter, but it does matter, and it will certainly matter in the future. I know that not all Conservative Members agree with this proposal. They should think about the consequences of this road and the proposals, and about the seriousness of it for their own party interests, because the people back home will think about it and will vote accordingly.

Lord James Douglas-Hamilton: rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 167; Noes 88.

Division No. 108]
[10 pm


AYES


Alison, Rt Hon Michael
Greenway, Harry


Amess, David
Gregory, Conal


Arnold, Tom
Griffiths, Peter (Portsm'th N)


Baker, Nicholas (Dorset N)
Ground, Patrick


Bevan, David Gilroy
Hamilton, Neil (Tatton)


Biffen, Rt Hon John
Hargreaves, Kenneth


Blaker, Rt Hon Sir Peter
Harris, David


Bonsor, Sir Nicholas
Hawkins, Sir Paul (N'folk SW)


Boscawen, Hon Robert
Henderson, Barry


Bottomley, Peter
Higgins, Rt Hon Terence L.


Bottomley, Mrs Virginia
Hind, Kenneth


Bowden, Gerald (Dulwich)
Holt, Richard


Braine, Rt Hon Sir Bernard
Howarth, Gerald (Cannock)


Bright, Graham
Howell, Ralph (Norfolk, N)


Brooke, Hon Peter
Hunt, David (Wirral W)


Browne, John
Jackson, Robert


Buchanan-Smith, Rt Hon A.
Jenkin, Rt Hon Patrick


Burt, Alistair
Jessel, Toby


Carlisle, John (Luton N)
Jones, Gwilym (Cardiff N)


Carlisle, Kenneth (Lincoln)
Jones, Robert (Herts W)


Chope, Christopher
Jopling, Rt Hon Michael


Churchill, W. S.
Kellett-Bowman, Mrs Elaine


Clark, Dr Michael (Rochford)
Key, Robert


Clark, Sir W. (Croydon S)
King, Roger (B'ham N'field)


Clarke, Rt Hon K. (Rushcliffe)
Knox, David


Colvin, Michael
Lang, Ian


Conway, Derek
Lawrence, Ivan


Coombs, Simon
Lee, John (Pendle)


Cope, John
Lennox-Boyd, Hon Mark


Cormack, Patrick
Lewis, Sir Kenneth (Stamf'd)


Corrie, John
Lightbown, David


Currie, Mrs Edwina
Lilley, Peter


Dickens, Geoffrey
Lloyd, Peter (Fareham)


Dorrell, Stephen
Lord, Michael


Dover, Den
McCurley, Mrs Anna


Durant, Tony
MacKay, John (Argyll &amp; Bute)


Emery, Sir Peter
Maclean, David John


Evennett, David
McNair-Wilson, M. (N'bury)


Fallon, Michael
McQuarrie, Albert


Favell, Anthony
Major, John


Fookes, Miss Janet
Malone, Gerald


Forsyth, Michael (Stirling)
Mather, Carol


Forth, Eric
Maude, Hon Francis


Fowler, Rt Hon Norman
Maxwell-Hyslop, Robin


Fox, Marcus
Merchant, Piers


Franks, Cecil
Mills, Sir Peter (West Devon)


Fraser, Peter (Angus East)
Monro, Sir Hector


Freeman, Roger
Moore, Rt Hon John


Galley, Roy
Murphy, Christopher


Garel-Jones, Tristan
Neubert, Michael


Goodhart, Sir Philip
Newton, Tony


Goodlad, Alastair
Normanton, Tom


Gower, Sir Raymond
Onslow, Cranley


Grant, Sir Anthony
Osborn, Sir John





Page, Richard (Herts SW)
Thatcher, Rt Hon Mrs M.


Pollock, Alexander
Thomas, Rt Hon Peter


Portillo, Michael
Thompson, Donald (Calder V)


Powley, John
Thompson, Patrick (N'ich N)


Proctor, K. Harvey
Thornton, Malcolm


Raffan, Keith
Thurnham, Peter


Rhodes James, Robert
Townend, John (Bridlington)


Rhys Williams, Sir Brandon
Tracey, Richard


Ridley, Rt Hon Nicholas
Trippier, David


Rifkind, Rt Hon Malcolm
van Straubenzee, Sir W.


Rippon, Rt Hon Geoffrey
Vaughan, Sir Gerard


Roe, Mrs Marion
Waddington, David


Sackville, Hon Thomas
Wakeham, Rt Hon John


Sainsbury, Hon Timothy
Waller, Gary


Shaw, Giles (Pudsey)
Ward, John


Shaw, Sir Michael (Scarb')
Wardle, C. (Bexhill)


Shelton, William (Streatham)
Watts, John


Shepherd, Colin (Hereford)
Wheeler, John


Shersby, Michael
Whitfield, John


Silvester, Fred
Wiggin, Jerry


Sims, Roger
Wigley, Dafydd


Skeet, Sir Trevor
Wilson, Gordon


Smith, Sir Dudley (Warwick)
Winterton, Mrs Ann


Soames, Hon Nicholas
Winterton, Nicholas


Steen, Anthony
Woodcock, Michael


Stevens, Lewis (Nuneaton)
Young, Sir George (Acton)


Stewart, Allan (Eastwood)



Stewart, Rt Hon D. (W Isles)
Tellers for the Ayes:


Stradling Thomas, Sir John
Lord James Douglas-Hamilton


Sumberg, David
and


Taylor, John (Solihull)
Mr. Michael Hirst.


Tebbit, Rt Hon Norman





NOES


Alton, David
Kennedy, Charles


Bagier, Gordon A. T.
Kirkwood, Archy


Barron, Kevin
Lamond, James


Beckett, Mrs Margaret
Leadbitter, Ted


Beith, A. J.
Leighton, Ronald


Benn, Rt Hon Tony
Lloyd, Tony (Stretford)


Bray, Dr Jeremy
McCartney, Hugh


Brown, Gordon (D'f'mline E)
McDonald, Dr Oonagh


Brown, Ron (E'burgh, Leith)
McKay, Allen (Penistone)


Bruce, Malcolm
McKelvey, William


Buchan, Norman
MacKenzie, Rt Hon Gregor


Campbell-Savours, Dale
McTaggart, Robert


Canavan, Dennis
McWilliam, John


Carlile, Alexander (Montg'y)
Madden, Max


Clay, Robert
Martin, Michael


Cocks, Rt Hon M. (Bristol S)
Maxton, John


Cook, Robin F. (Livingston)
Michie, William


Corbyn, Jeremy
Morris, Rt Hon A. (W'shawe)


Craigen, J. M.
O'Brien, William


Crowther, Stan
O'Neill, Martin


Davies, Ronald (Caerphilly)
Parry, Robert


Dewar, Donald
Patchett, Terry


Dixon, Donald
Pike, Peter


Dormand, Jack
Prescott, John


Douglas, Dick
Richardson, Ms Jo


Dubs, Alfred
Robertson, George


Eadie, Alex
Rogers, Allan


Evans, John (St. Helens N)
Ross, Ernest (Dundee W)


Fatchett, Derek
Ross, Stephen (Isle of Wight)


Faulds, Andrew
Shore, Rt Hon Peter


Field, Frank (Birkenhead)
Skinner, Dennis


Flannery, Martin
Smith, Rt Hon J. (M'ds E)


Foster, Derek
Steel, Rt Hon David


Foulkes, George
Stott, Roger


Garrett, W. E.
Strang, Gavin


Gilbert, Rt Hon Dr John
Thompson, J. (Wansbeck)


Godman, Dr Norman
Tinn, James


Hamilton, James (M'well N)
Wallace, James


Haynes, Frank
Wardell, Gareth (Gower)


Hogg, N. (C'nauld &amp; Kilsyth)
Wareing, Robert


Home Robertson, John
Williams, Rt Hon A.


Howells, Geraint
Winnick, David


Hoyle, Douglas



Hughes, Robert (Aberdeen N)
Tellers for the Noes:


Johnston, Sir Russell
Dr. John Marek and


Jones, Barry (Alyn &amp; Deeside)
Mr. Terry Lewis.

Question accordingly agreed to.

Question put accordingly, That the Bill be now read the Third time:—

The House divided: Ayes 181, Noes 81.

Division No. 109]
[10.09 pm


AYES


Alison, Rt Hon Michael
Harris, David


Alton, David
Havers, Rt Hon Sir Michael


Amess, David
Hawkins, Sir Paul (N'folk SW)


Arnold, Tom
Higgins, Rt Hon Terence L.


Atkins, Rt Hon Sir H.
Hind, Kenneth


Baker, Nicholas (Dorset N)
Holt, Richard


Beith, A. J.
Howarth, Gerald (Cannock)


Bevan, David Gilroy
Howell, Rt Hon D. (G'ldford)


Biffen, Rt Hon John
Howell, Ralph (Norfolk, N)


Blaker, Rt Hon Sir Peter
Howells, Geraint


Bonsor, Sir Nicholas
Hunt, David (Wirral W)


Boscawen, Hon Robert
Jackson, Robert


Bottomley, Peter
Jenkin, Rt Hon Patrick


Bottomley, Mrs Virginia
Jessel, Toby


Bowden, Gerald (Dulwich)
Johnston, Sir Russell


Braine, Rt Hon Sir Bernard
Jones, Gwilym (Cardiff N)


Bright, Graham
Jones, Robert (Herts W)


Brooke, Hon Peter
Jopling, Rt Hon Michael


Browne, John
Kellett-Bowman, Mrs Elaine


Bruce, Malcolm
Kennedy, Charles


Buchanan-Smith, Rt Hon A.
Key, Robert


Buck, Sir Antony
King, Roger (B'ham N'field)


Burt, Alistair
Kirkwood, Archy


Carlile, Alexander (Montg'y)
Knox, David


Carlisle, John (Luton N)
Lang, Ian


Carlisle, Kenneth (Lincoln)
Lawrence, Ivan


Chope, Christopher
Lee, John (Pendle)


Churchill, W. S.
Lennox-Boyd, Hon Mark


Clark, Dr Michael (Rochford)
Lewis, Sir Kenneth (Stamf'd)


Clark, Sir W. (Croydon S)
Lightbown, David


Clarke, Rt Hon K. (Rushcliffe)
Lilley, Peter


Colvin, Michael
Lloyd, Peter (Fareham)


Conway, Derek
Lord, Michael


Coombs, Simon
McCurley, Mrs Anna


Cope, John
MacKay, John (Argyll &amp; Bute)


Corrie, John
Maclean, David John


Currie, Mrs Edwina
McNair-Wilson, M. (N'bury)


Dickens, Geoffrey
McQuarrie, Albert


Dorrell, Stephen
Major, John


Douglas-Hamilton, Lord J.
Malone, Gerald


Dover, Den
Mather, Carol


Durant, Tony
Maude, Hon Francis


Emery, Sir Peter
Maxwell-Hyslop, Robin


Evennett, David
Merchant, Piers


Fallon, Michael
Mills, Sir Peter (West Devon)


Favell, Anthony
Monro, Sir Hector


Fookes, Miss Janet
Moore, Rt Hon John


Forsyth, Michael (Stirling)
Murphy, Christopher


Forth, Eric
Neubert, Michael


Fowler, Rt Hon Norman
Newton, Tony


Fox, Marcus
Normanton, Tom


Franks, Cecil
Onslow, Cranley


Fraser, Peter (Angus East)
Osborn, Sir John


Freeman, Roger
Page, Richard (Herts SW)


Galley, Roy
Percival, Rt Hon Sir Ian


Garel-Jones, Tristan
Pollock, Alexander


Goodhart, Sir Philip
Portillo, Michael


Goodlad, Alastair
Powley, John


Gower, Sir Raymond
Proctor, K. Harvey


Grant, Sir Anthony
Raffan, Keith


Greenway, Harry
Rhodes James, Robert


Gregory, Conal
Rhys Williams, Sir Brandon


Griffiths, Peter (Portsm'th N)
Ridley, Rt Hon Nicholas


Ground, Patrick
Rifkind, Rt Hon Malcolm


Hamilton, Neil (Tatton)
Rippon, Rt Hon Geoffrey


Hargreaves, Kenneth
Roe, Mrs Marion





Ross, Stephen (Isle of Wight)
Thornton, Malcolm


Sackville, Hon Thomas
Thurnham, Peter


Sainsbury, Hon Timothy
Townend, John (Bridlington)


Shaw, Giles (Pudsey)
Tracey, Richard


Shaw, Sir Michael (Scarb')
Trippier, David


Shelton, William (Streatham)
van Straubenzee, Sir W.


Shepherd, Colin (Hereford)
Vaughan, Sir Gerard


Shersby, Michael
Waddington, David


Silvester, Fred
Wakeham, Rt Hon John


Sims, Roger
Wallace, James


Skeet, Sir Trevor
Waller, Gary


Smith, Sir Dudley (Warwick)
Ward, John


Soames, Hon Nicholas
Wardle, C. (Bexhill)


Steel, Rt Hon David
Watts, John


Steen, Anthony
Wheeler, John


Stevens, Lewis (Nuneaton)
Whitfield, John


Stewart, Allan (Eastwood)
Wiggin, Jerry


Stewart, Rt Hon D. (W Isles)
Wigley, Dafydd


Stradling Thomas, Sir John
Wilson, Gordon


Sumberg, David
Winterton, Mrs Ann


Taylor, John (Solihull)
Winterton, Nicholas


Tebbit, Rt Hon Norman
Woodcock, Michael


Thatcher, Rt Hon Mrs M.
Young, Sir George (Acton)


Thomas, Dafydd (Merioneth)



Thomas, Rt Hon Peter
Tellers for the Ayes:


Thompson, Donald (Calder V)
Mr. Michael Hirst and


Thompson, Patrick (N'ich N)
Mr. Barry Henderson.

Question accordingly agreed to.

Bill read the Third time, and passed.

Housing (Scotland)

The Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move,
That the draft Housing Support Grant (Scotland) Variation (No. 2) Order 1986, which was laid before this House on 6th March, be approved.
I shall explain briefly the reasons for the Government bringing forward the order. It will be welcomed by all sides of the House. Hon. Members will recall that the first variation order for 1985–86 was debated on 12 February at the same time as the main housing support grant order for 1986–87. Members with longer memories may recall that a similar variation order for 1984–85 was debated in late January 1985, at the same time as the 1985–86 main order. Early 1985 saw exceptional rises in interest rates and authorities' actual outturn interest rate figures, which have only recently become available, now show that average levels for 1984–85 exceeded even those taken into account in the 1984–85 variation order.
For this reason, and because a substantial sum would otherwise be lost in payment to local authorities, the Government have decided to take the exceptional step of bringing forward tonight a second variation order, which has the effect of paying an additional £4·6 million in total to 30 of Scotland's housing authorities. If the House approves the order, the extra payments will be included with next week's final support grant payments for the current financial year.
In addition to the payments approved on 12 February, this will assist authorities in keeping 1986–87 rent increases within reasonable bounds, and in maintaining levels of expenditure on the management and maintenance of their housing stock.
I will not burden the House with further details. Full explanation and details of the calculations that are most concerned are listed in the report which accompanies the draft variation order.
The Convention of Scottish Local Authorities has welcomed our introduction of the order. The action that we are taking to expedite payment of £4·6 million in housing support grants demonstrates our continuing concern to ensure that authorities do have the resources to meet essential local needs. I commend the order to the House.

Sir Russell Johnston: The House would be more than a little gullible if it accepted the last statement that the Secretary of State made, that the payment of this sum of money represents any noticeable change in Government housing policy.
Like the right hon. Gentleman, I also do not wish to detain the House for any length of time, but I would like to put one point to the Secretary of State. He said that this variation emanated from the fact that, because of changes in interest rates and so on a certain amount of money that he originally thought was not available has become available. That has certain consequences for local authorities. In many cases, it has meant that the local authorities have over-increased rents in anticipation of their support grants.

Mr. Rifkind: indicated dissent.

Sir Russell Johnston: I see that the Secretary of State is shaking his head, but I can think of at least two local authorities in my constituency that have charged a higher rent than they would have charged had they known that this payment might become available.

Mr. Rifkind: The councils should not have had to do that, because local authorities have always received extra payments for extra expenditure caused by interest rates. That has been the policy for many years and is well known to all local authorities.

Sir Russell Johnston: Badenoch and Strathspey, in my constituency, an example that I am sure is mirrored throughout Scotland, is receiving a substantial sum. If it had known that that money would be available, it would not have increased its rents to the level it did.
Many local authorities set their budget at the beginning of the year, and the support grant variation comes perhaps two thirds of the way through the year, after the new rent levels have been set. The complaint is not that the Government give them this back payment, in view of fluctuations that perhaps the Government cannot immediately control, but that there should be some way in which the Government can stabilise the payments for local authorities.
I do not know exactly how this can be done, and neither do the councils, but it is unsatisfactory that local authorities do not receive such payments until all their budgets have been set. We are well into the year and in many cases—for example the Inverness district council—authorities would not have increased rents to the level that they have had there been the possibility of such payments.

Mr. Rifkind: indicated dissent

Sir Russell Johnston: It is all very well the Secretary of State shaking his head, but that is the view of finance officers of local authorities, and he should take some account of it.
Like any other hon. Member, I welcome increased payments for local authority housing accounts. However, local authorities should be able to forecast their budgets more realistically.

Mr. John Maxton: While I welcome any extra money for housing, let us be clear that the money being given by the Government is designed, not to benefit or improve any houses, but to ensure that local authorities do not get into financial problems because the Government got interest rates wrong in the first place. The extra money, to put it in crude terms, goes to the money lenders and not to any council house tenants. It will not reduce one rent, modernise one of the 216,000 houses that require complete modernisation, modernise one of the 134,000 houses that need partial modernisation, rewire one of the 107,000 houses that require rewiring, cure the dampness in one of the 108,699 houses that are damp, nor carry out major repairs on one of the 62,000 houses that require major rapairs. Not one extra penny will be spent on the disastrous crisis in Scottish housing.

Mr. Rifkind: I shall withdraw the order.

Mr. Maxton: The Secretary of State thinks that he is beginning to develop a sense of humour about Scotland. Most of us do not find the housing crisis and the conditions


in which many of our constituents live a laughing matter. It is not a laughing matter at all. If the Secretary of State finds it funny, he should ask his constituents in Westerhailes whether they find their housing conditions at all funny. I feel sure that they would not like to see him sitting there and laughing at the housing problems of Scotland.
We welcome any money that will ensure that Scottish local authorities do not get into problems with housing finance, but the Secretary of State should not run away with the idea that the order will benefit, or do anything to stop, the major housing crisis that Scotland faces now.
It is worth pointing out to the Secretary of State that only seven of the 30 local authorities receiving the money have Labour-controlled councils. The rest of them are a variety of different authorities.

Mr. Rifkind: Ah!

Mr. Maxton: The Secretary of State says "Ah", but the interest rates that he was so keen to talk about are paid by those other local authorities as well. Where help has not been given through housing support grant, the tenants have to pay the 60 per cent. loan charges through their rates. The Secretary of State is very keen to give extra help to those other local authorities. For many Labour-controlled authorities there is no help at all. The tenants will face increased rents to pay for those loans.
We welcome whatever sums are available, for whatever purposes, but the Secretary of State should not run away with the idea that by this order he is giving great benefit to housing in Scotland.

Question put and agreed to.

Resolved.
That the draft Housing Support Grant (Scotland) Variation (No. 2) Order 1986, which was laid before this House on 6th March, be approved.

Privileges

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That this House agrees with the Committee of Privileges in its Second Report of the last Session of Parliament (House of Commons Paper No. 555 (1984–85)); and declares that the Recommendation contained in paragraph 14(iv) of the Summary of Conclusions and Recommendations of the Report do have effect from the beginning of this Session.
Last week the House was unfortunately unable to make a decision on the motion to approve the Privileges Committee report. I hope we shall encounter no such difficulty tonight. There is no need to repeat what I said supporting the motion last week, since the House is now well aware of my views. I therefore commend the motion to the House and trust that it will be agreed tonight.

Mr. Peter Shore: I have had the opportunity of reading the report of the debate that took place last week. Perhaps the House will be relieved to know that I find no reason to add to our subtract from what I said then.
I conclude simply by commending, as I did then, the resolution before the House tonight.

Sir Peter Emery: I will not keep the House long. I have no reason to subtract from anything that I said in the previous debate, because I got out only one sentence before the question was put. I will make now the three points that I started to make.
I said that the Privileges Committee is right to believe that pre-publication of reports from Select Committees does considerable harm to their work. I could not agree with the right hon. Member for Chesterfield (Mr. Benn), who believed that all the information that could be gained at any time ought to be published.
Pre-publication of reports affects the proper working of Select Committees in two ways. First, while it is correct for a Committee to want to hear all evidence and opinions in order to influence its judgments, that should not be done through the press in early publication, but in evidence properly given to a Committee. Pre-publication of parts, or incorrect parts, of draft reports often brings an influence to that Committee that is quite wrong.
Secondly, such action influences the way in which a Chairman writes a report, if he believes that his report is likely to be leaked. Whenever I have taken part in writing reports, as a Chairman, I have usually wanted to go to one extreme or the other because there was disagreement within the Committee or decisions were not finalised. If one goes to an extreme, a report is either watered down or strengthened. It is one of the ways in which one can get agreement from everybody. Thus, the idea that the prepublication of the draft report shows what the Committee will decide is usually incorrect.
My third and major point is that the Committee of Privileges' recommendations do not go far enough. We should try to stamp out the pre-publication of Committee reports, remembering that it is generally agreed that the leaking of information is wrong. It should be understood from this debate that pre-publication is a breach of privilege of the House.
The Committee has suggested that there is no way by which we can stamp out publication by the press. I disagree. If we held not the reporter or editor of a newspaper responsible for a breach of privilege of the House but the proprietor or publisher, we would need do that only once for the order to go out to every editor and reporter, "Make certain that no breach of privilege occurs in anything you publish in my newspaper." That might be called draconian, but it would ensure that newspapers generally understood that they should not publish until a Committee had decided absolutely on its final report.
I regret that the Committee of Privileges has not gone that far. Despite that, I see no reason not to accept its recommendations. I hope that they will work. If they do not, perhaps the press will realise that we must take stronger steps than are now proposed.

Mr. D. N. Campbell-Savours: I do not agree with the hon. Member for Honiton (Sir P. Emery), because, in my view, we should leave the media alone. The issues with which we are concerned relate to hon. Members, and we should address our remarks to them.
I spoke at length in last week's debate, and I again give notice of my intention to divide the House on this issue. I shall do so on the principle that the report does not refer to the introduction of the Liaison Committee, which is the matter to which I referred in the last debate.
The question of that Committee and its intervention in these matters was raised as an issue only following discussions that took place through the usual channels. The effect has been to diffuse the power of Mr. Speaker. Historically, these matters have uniquely always been referred to Mr. Speaker, and it has been for him to decide whether a motion of precedence should be permitted.
On this occasion we are introducing a filter between the Select Committee, which decides that substantial interference is taking place, and the Committee of Privileges, which must also consider whether it can find in the same way and impose whatever sanctions it feels to be necessary. Rather than have that filter, the route should be clean, direct from the complaining Select Committee to the Committee of Privileges.
That would eventually result in frivolous complaints being avoided. I gather that the Liaison Committee was introduced with the idea of avoiding frivolous complaints being made. It was felt that it would be able to deal with applications and ensure that the Committee of Privileges dealt only with substantial matters. As I say, we do not need that filter. The route should be direct and the Committee of Privileges should, if it receives frivolous applications, inform the Select Committees concerned that they are frivolous. That should influence the judgment of those Select Committees about the complaints that they make in future.
I am trying to put the pressure back on to the Select Committees to be wise in their judgments about what matters should be referred in so far as these cause substantial damage or interference with the workings of a Select Committee. This is of great importance, because we are debating the freedom of information and I believe that Select Committees are sitting on documents which should be in the public domain.
There is no reason why those documents should be held by Select Committees until they decide to report to the

House, or alternatively until they decide not to report to the House on certain items which they feel, for whatever reason, may have to be sidelined.
I serve on the Public Accounts Committee, and I spent some time yesterday in that Committee arguing the point about confidentiality and about documents which I believe should be within the public domain. The only way that Select Committees can take reasonable decisions is if they are required to do that knowing that the Privileges Committee would not look too kindly on frivolous applications and complaints being put before it.
The Liaison Committee provides a danger, in that, at the end of the day it will not operate in the way recommended or wanted by the members of the Privileges Committee. Furthermore, if the Liaison Committee is crucial to the exercise in trying to establish what would constitute a breach of privilege, why is it not embodied in the report's recommendations? Why is the House having to accept the imposition of a Liaison Committee because of the contribution of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and that of the right hon. Gentleman the Leader of the House?
I believe that what we are doing tonight is wrong, and on that basis I intend to vote against the recommendation.

Mr. Dennis Skinner: My hon. Friend the Member for Workington (Mr. Campbell-Savours) said that he would vote against the measure; some of us, including my hon. Friend, voted against it last week when the Government could not find enough hon. Members to carry it through.

Mr. Biffen: That was not our responsibility.

Mr. Skinner: The Leader of the House says that was not the Government's responsibility. It struck me that the Government were trying to get the motion through. The Whips were running about like—I was going to say like something else—like flies, trying to get the payroll vote back into the House in the same way that they tried tonight to get through the Private Bill on Edinburgh. It was clear what happened. They even got the Prime Minister in tonight.
However, last week, for some reason, which may have had something to do with Cheltenham and the races, Conservative Members were not present to vote. The Cheltenham Gold cup was on last week, but the Government, who have finished up with the biggest majority since the end of war, could not manage to get more than 34 Conservative Members through the Lobby. That was a strange affair. Most of the Tory Members did not seem to care tuppence about the Committee's report and did not turn up for work. The result was that the Government did not get the requisite quorum. They have had to bring the measure back to the House tonight. I do not know what all the Tories were doing at Cheltenham, but I guess that they were leaking, telling their favourite Lobby correspondents what was going on in these Select Committees.
I do not know what all the fuss is about. What do these Committees do? They write reports, and, Ministers rubbish them. There was one on Sellafield last week and, within three days, the Secretary of State for Energy was on the wireless and television issuing a press report saying that he did not care tuppence for the report. I cannot recall


one of the reports of these important Select Committees resulting in any dramatic change either in the House or, more importantly for the people we represent, outside the House.
I therefore do not get involved or enmeshed in these weird Select Committees, which are all about trying to get a soppy consensus. I am not into that. I can tell my hon. Friend the Member for Workington that if I were a member of a Select Committee—I am not—I would believe that the Committees should be held not in private but in public. The fact that they are held in private is probably one of the reasons why they do not work properly. The press and the public should be present, if they so wish, so that they know what is going on.
If that happened, there would not be any leaks.
There are no leaks in the House. Hansard reports what hon. Members say. Why should it be different in a Select Committee? It is because of the gravitation towards the middle and the desire for consensus. I did not become a Member to represent that view. I became a Member to represent the Labour party and the class interests associated with it.
My hon. Friend the Member for Workington and I shall vote against the motion, for slightly different reasons. I think that other hon. Members would agree with me, but they probably believe that the Committee's recommendation is inconsequential and does not really matter. Like the Tory Members last week, those hon. Members will not bother to vote.

Mr. Biffen: By leave of the House, I shall reply briefly, out of courtesy, to this short debate which has been valuable in showing an understanding of the Privileges Committee's proposals.
I understand the zest of my hon. Friend the Member for Honiton (Sir P. Emery) for exacting punishment on editors or proprietors, but I have to tell him, not that that view has been rejected by the Privileges Committee, but that that it is for the House to consider infringements when they arise. When infringements arise because of the leaking of information by a Member of Parliament or the staff of a Member of Parliament who cannot be detected, that provides a happy circumstance in which to wreak the only punishment available—on the newspaper that publishes that information. We live with that difficulty and, doubtless, experience will guide us in the passage of time on how to proceed.
I have a lively sympathy with the argument of the hon. Member for Workington (Mr. Campbell-Savours). I think that there is not a great difference between us. I hope that that will not mean that he goes home sad this evening. In all matters of privilege—we saw this very effectively yesterday—it is a question not only of living by the book but of living by an application of common sense and a measured judgment through experience.
It was thought, not for a sinister reason, that the Liaison Committee would be particularly helpful in giving guidance to the Privileges Committee in the application of that essential parliamentary requisite—common sense—in trying to handle privileges matters. If we do not arm ourselves with common sense, we make ourselves into laughing stocks. That has happened many times when the House has tried to deal with matters of privilege. I hope

that the hon. Member for Workington will be charitable about our modest innovation and will see in it not any sinister motive but the desire of the House to take measured footsteps, pace by pace.
That brings me to the charming intervention of the hon. Member for Bolsover (Mr. Skinner). The idea that I am put in this acutely personally embarrassing position of bringing back to the House for the second time a matter on which I desperately seek the consent of hon. Members because of the ineptitude of the Conservative Whips on Cheltenham Gold Cup day is an interpretation that deserves to be savoured not only in the House but outside it. However, I have to tell the hon. Gentleman that I think that, in many political matters, especially this one, the cock-up theory should be more favoured than the conspiracy one.
This evening, we are performing a modest role for the House of Commons because—and for no other reason—we failed by the magic figure of one to get the matter confirmed by the House last week. I am reminded of the time when my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) was in charge of retail price maintenance and carried the vote by one. He triumphantly said, "The one is enough." On this occasion, I had to conclude in the words of Browning,
Oh, the little more, and how much it is!
That was certainly effectively true this evening. I quite understand why the hon. Member for Bolsover has a good-natured contempt for the working of Select Committees.
Parliament is a multi-disciplinary school. Many of us thoroughly enjoy fighting politics in the conventional sense across the Floor of the House and no one does it more effectively than the hon. Member for Bolsover. That does not entitle us to disparage those who seek the route of Select Committees and their particular method of influencing parliamentary and public opinion in great matters of national debate. I hope that we can live in a House of Commons where all these disciplines are happily and generously contained. On that basis I hope I can persuade the hon. Member for Bolsover to be with me in the Lobby this evening.

Question put:—

The House divided: Ayes 104, Noes 22.

Division No. 109]
[10.09 pm


AYES


Alison, Rt Hon Michael
Harris, David


Alton, David
Havers, Rt Hon Sir Michael


Amess, David
Hawkins, Sir Paul (N'folk SW)


Arnold, Tom
Higgins, Rt Hon Terence L.


Atkins, Rt Hon Sir H.
Hind, Kenneth


Baker, Nicholas (Dorset N)
Holt, Richard


Beith, A. J.
Howarth, Gerald (Cannock)


Bevan, David Gilroy
Howell, Rt Hon D. (G'ldford)


Biffen, Rt Hon John
Howell, Ralph (Norfolk, N)


Blaker, Rt Hon Sir Peter
Howells, Geraint


Bonsor, Sir Nicholas
Hunt, David (Wirral W)


Boscawen, Hon Robert
Jackson, Robert


Bottomley, Peter
Jenkin, Rt Hon Patrick


Bottomley, Mrs Virginia
Jessel, Toby


Bowden, Gerald (Dulwich)
Johnston, Sir Russell


Braine, Rt Hon Sir Bernard
Jones, Gwilym (Cardiff N)


Bright, Graham
Jones, Robert (Herts W)


Brooke, Hon Peter
Jopling, Rt Hon Michael


Browne, John
Kellett-Bowman, Mrs Elaine


Bruce, Malcolm
Kennedy, Charles


Buchanan-Smith, Rt Hon A.
Key, Robert


Buck, Sir Antony
King, Roger (B'ham N'field)


Burt, Alistair
Kirkwood, Archy


Carlile, Alexander (Montg'y)
Knox, David


Carlisle, John (Luton N)
Lang, Ian


Carlisle, Kenneth (Lincoln)
Lawrence, Ivan


Chope, Christopher
Lee, John (Pendle)


Churchill, W. S.
Lennox-Boyd, Hon Mark


Clark, Dr Michael (Rochford)
Lewis, Sir Kenneth (Stamf'd)


Clark, Sir W. (Croydon S)
Lightbown, David


Clarke, Rt Hon K. (Rushcliffe)
Lilley, Peter


Colvin, Michael
Lloyd, Peter (Fareham)


Conway, Derek
Lord, Michael


Coombs, Simon
McCurley, Mrs Anna


Cope, John
MacKay, John (Argyll &amp; Bute)


Corrie, John
Maclean, David John


Currie, Mrs Edwina
McNair-Wilson, M. (N'bury)


Dickens, Geoffrey
McQuarrie, Albert


Dorrell, Stephen
Major, John


Douglas-Hamilton, Lord J.
Malone, Gerald


Dover, Den
Mather, Carol


Durant, Tony
Maude, Hon Francis


Emery, Sir Peter
Maxwell-Hyslop, Robin


Evennett, David
Merchant, Piers


Fallon, Michael
Mills, Sir Peter (West Devon)


Favell, Anthony
Monro, Sir Hector


Fookes, Miss Janet
Moore, Rt Hon John


Forsyth, Michael (Stirling)
Murphy, Christopher


Forth, Eric
Neubert, Michael


Fowler, Rt Hon Norman
Newton, Tony


Fox, Marcus
Normanton, Tom


Franks, Cecil
Onslow, Cranley


Fraser, Peter (Angus East)
Osborn, Sir John


Freeman, Roger
Page, Richard (Herts SW)


Galley, Roy
Percival, Rt Hon Sir Ian


Garel-Jones, Tristan
Pollock, Alexander


Goodhart, Sir Philip
Portillo, Michael


Goodlad, Alastair
Powley, John


Gower, Sir Raymond
Proctor, K. Harvey


Grant, Sir Anthony
Raffan, Keith


Greenway, Harry
Rhodes James, Robert


Gregory, Conal
Rhys Williams, Sir Brandon


Griffiths, Peter (Portsm'th N)
Ridley, Rt Hon Nicholas


Ground, Patrick
Rifkind, Rt Hon Malcolm


Hamilton, Neil (Tatton)
Rippon, Rt Hon Geoffrey


Hargreaves, Kenneth
Roe, Mrs Marion





Ross, Stephen (Isle of Wight)
Thornton, Malcolm


Sackville, Hon Thomas
Thurnham, Peter


Sainsbury, Hon Timothy
Townend, John (Bridlington)


Shaw, Giles (Pudsey)
Tracey, Richard


Shaw, Sir Michael (Scarb')
Trippier, David


Shelton, William (Streatham)
van Straubenzee, Sir W.


Shepherd, Colin (Hereford)
Vaughan, Sir Gerard


Shersby, Michael
Waddington, David


Silvester, Fred
Wakeham, Rt Hon John


Sims, Roger
Wallace, James


Skeet, Sir Trevor
Waller, Gary


Smith, Sir Dudley (Warwick)
Ward, John


Soames, Hon Nicholas
Wardle, C. (Bexhill)


Steel, Rt Hon David
Watts, John


Steen, Anthony
Wheeler, John


Stevens, Lewis (Nuneaton)
Whitfield, John


Stewart, Allan (Eastwood)
Wiggin, Jerry


Stewart, Rt Hon D. (W Isles)
Wigley, Dafydd


Stradling Thomas, Sir John
Wilson, Gordon


Sumberg, David
Winterton, Mrs Ann


Taylor, John (Solihull)
Winterton, Nicholas


Tebbit, Rt Hon Norman
Woodcock, Michael


Thatcher, Rt Hon Mrs M.
Young, Sir George (Acton)


Thomas, Dafydd (Merioneth)



Thomas, Rt Hon Peter
Tellers for the Ayes:


Thompson, Donald (Calder V)
Mr. Michael Hirst and


Thompson, Patrick (N'ich N)
Mr. Barry Henderson.




NOES


Adams, Allen (Paisley N)
Leadbitter, Ted


Bagier, Gordon A. T.
Leighton, Ronald


Barron, Kevin
Lloyd, Tony (Stretford)


Beckett, Mrs Margaret
McCartney, Hugh


Benn, Rt Hon Tony
McDonald, Dr Oonagh


Bray, Dr Jeremy
McKay, Allen (Penistone)


Brown, Gordon (D'f'mline E)
McKelvey, William


Brown, Ron (E'burgh, Leith)
MacKenzie, Rt Hon Gregor


Buchan, Norman
McTaggart, Robert


Campbell-Savours, Dale
McWilliam, John


Canavan, Dennis
Madden, Max


Clay, Robert
Martin, Michael


Cocks, Rt Hon M. (Bristol S)
Maxton, John


Cook, Robin F. (Livingston)
Michie, William


Corbyn, Jeremy
Millan, Rt Hon Bruce


Craigen, J. M.
Morris, Rt Hon A. (W'shawe)


Crowther, Stan
O'Brien, William


Davies, Ronald (Caerphilly)
O'Neill, Martin


Dewar, Donald
Parry, Robert


Dixon, Donald
Patchett, Terry


Dormand, Jack
Pike, Peter


Douglas, Dick
Prescott, John


Dubs, Alfred
Richardson, Ms Jo


Eadie, Alex
Robertson, George


Evans, John (St. Helens N)
Rogers, Allan


Fatchett, Derek
Ross, Ernest (Dundee W)


Faulds, Andrew
Shore, Rt Hon Peter


Field, Frank (Birkenhead)
Skinner, Dennis


Flannery, Martin
Smith, Rt Hon J. (M'ds E)


Foster, Derek
Snape, Peter


Foulkes, George
Stott, Roger


Fraser, J. (Norwood)
Strang, Gavin


Garrett, W. E.
Thompson, J. (Wansbeck)


Godman, Dr Norman
Tinn, James


Hamilton, James (M'well N)
Wardell, Gareth (Gower)


Haynes, Frank
Wareing, Robert


Hogg, N. (C'nauld &amp; Kilsyth)
Williams, Rt Hon A.


Home Robertson, John
Winnick, David


Hoyle, Douglas



Hughes, Robert (Aberdeen N)
Tellers for the Noes:


Jones, Barry (Alyn &amp; Deeside)
Dr. John Marek and


Lambie, David
Mr. Terry Lewis.


Lamond, James

Division No. 110]
[10.55 pm


AYES


Alison, Rt Hon Michael
Fookes, Miss Janet


Arnold, Tom
Forth, Eric


Aspinwall, Jack
Foulkes, George


Atkins, Rt Hon Sir H.
Fowler, Rt Hon Norman


Bagier, Gordon A. T.
Franks, Cecil


Beith, A. J.
Freeman, Roger


Biffen, Rt Hon John
Galley, Roy


Boscawen, Hon Robert
Garel-Jones, Tristan


Bottomley, Peter
Goodhart, Sir Philip


Bottomley, Mrs Virginia
Grant, Sir Anthony


Bright, Graham
Gregory, Conal


Brooke, Hon Peter
Ground, Patrick


Buchanan-Smith, Rt Hon A.
Hamilton, Neil (Tatton)


Buck, Sir Antony
Havers, Rt Hon Sir Michael


Burt, Alistair
Higgins, Rt Hon Terence L.


Carlisle, John (Luton N)
Hind, Kenneth


Clarke, Rt Hon K. (Rushcliffe)
Hogg, N. (C'nauld &amp; Kilsyth)


Conway, Derek
Holt, Richard


Cope, John
Hunt, David (Wirral W)


Currie, Mrs Edwina
Jackson, Robert


Douglas-Hamilton, Lord J.
Johnston, Sir Russell


Dover, Den
Jones, Gwilym (Cardiff N)


Durant, Tony
Jones, Robert (Herts W)


Emery, Sir Peter
Kennedy, Charles


Evennett, David
Lambie, David






Lang, Ian
Rossi, Sir Hugh


Lee, John (Pendle)
Sainsbury, Hon Timothy


Leighton, Ronald
Shepherd, Colin (Hereford)


Lennox-Boyd, Hon Mark
Shore, Rt Hon Peter


Lilley, Peter
Stevens, Lewis (Nuneaton)


Lloyd, Peter (Fareham)
Stewart, Allan (Eastwood)


Lord, Michael
Stott, Roger


McCurley, Mrs Anna
Stradling Thomas, Sir John


MacKenzie, Rt Hon Gregor
Taylor, John (Solihull)


Major, John
Thatcher, Rt Hon Mrs M.


Malone, Gerald
Thomas, Rt Hon Peter


Martin, Michael
Thompson, Donald (Calder V)


Mather, Carol
Thurnham, Peter


Maude, Hon Francis
Townend, John (Bridlington)


Merchant, Piers
van Straubenzee, Sir W.


Mitchell, David (Hants NW)
Wakeham, Rt Hon John


Morris, Rt Hon J. (Aberavon)
Waller, Gary


Neubert, Michael
Wardell, Gareth (Gower)


Newton, Tony
Wardle, C. (Bexhill)


O'Neill, Martin
Watts, John


Osborn, Sir John
Wheeler, John


Page, Richard (Herts SW)
Whitfield, John


Raffan, Keith
Williams, Rt Hon A.


Rhodes James, Robert
Wilson, Gordon


Rhys Williams, Sir Brandon
Yeo, Tim


Ridley, Rt Hon Nicholas



Rifkind, Rt Hon Malcolm
Tellers for the Ayes


Rippon, Rt Hon Geoffrey
Mr. Barry Henderson and


Roe, Mrs Marion
Mr. Gerald Howarth.




NOES


Alton, David
McKelvey, William


Beckett, Mrs Margaret
McTaggart, Robert


Canavan, Dennis
Michie, William


Carlile, Alexander (Montg'y)
Parry, Robert


Clay, Robert
Patchett, Terry


Corbyn, Jeremy
Pike, Peter


Godman, Dr Norman
Richardson, Ms Jo


Haynes, Frank
Ross, Stephen (Isle of Wight)


Howells, Geraint
Wallace, James


Kirkwood, Archy



Lamond, James
Tellers for the Noes:


Lewis, Terence (Worsley)
Mr. D. N. Campbell-Savours and


Lloyd, Tony (Stretford)
Mr. Dennis Skinner.

Question accordingly agreed to.

Resolved,
That this House agrees with the Committee of Privileges in its Second Report of the last Session of Parliament (House of Commons Paper No. 555 (1984–85)); and declares that the Recommendation contained in paragraph 14(iv) of the Summary of Conclusions and Recommendations of the Report do have effect from the beginning of this Session.

PETITIONS

Social Security Reform

11 pm

Sir Russell Johnston: I beg to ask leave to present a petition on behalf of the members of the Inverness district of the Transport and General Workers Union Retired Members Association. One thousand of those members have appended their names to a humble petition to the House which expresses a view that legislation based on the "Social Security Reform: Programme for Action" White Paper would be extremely detrimental to the residents of the United Kingdom who are in receipt of social security benefits.
The petition says:
Wherefore your petitioners pray that your Honourable House do not pass legislation arising out of the Reform of Social Security White Paper.
The members feel that the reform involves a redistribution of benefit support within a cash-limited social security system away from women towards men within the family, away from childless poor and the elderly, and fails to achieve an integrated tax and social security system which would be fairer to all
The petition concludes:
And your petitioners, as in duty bound, will ever pray, etc.

To lie upon the Table.

Shops Bill

Mr. Michael J. Martin: I beg to ask leave to present a petition which was compiled by the efforts of Mr. Lawrence C. Kelly of 56 Ballendaloch drive, Glasgow, which deals with the Shops Bill. 'The petitioners ask that the Government do not pass legislation which will permit Sunday opening.
Contrary to popular opinion, the proposed legislation is not popular north of the border. I know that the Rev. Frank Myers, the minister of the central Springburn Church of Scotland, and his congregation would fully support this petition because a large number of the congregation and Frank Myers have written to me. They fear that, when and if the legislation is passed, it will mean we will have Sunday opening on the main streets of the cities in Scotland. That would be undesirable to our way of life and undesirable for the shop workers and members of the Union of Shop, Distributive and Allied Workers who are not enjoying a decent standard of living at present.
The petition concludes:
Wherefore your petitioners pray that your Honourable House do maintain legal limitations on Sunday trading to ensure that the special character of Sunday is protected. And your petitioners, as in duty bound, will ever pray, etc.

To lie upon the Table.

Drug Abuse (Glasgow)

Mr. Michael J. Martin: I beg to ask leave to present a very important petition which contains 1,865 signatures, mainly from the Germiston district of Glasgow, Springburn and also from the Royston district which is mainly in the constituency of my hon.


Friend the Member for Glasgow, Central (Mr. McTaggart), who wishes to be associated with this petition.
The people in the community are greatly concerned about the scale of drug abuse in the area. They call for this House to pass legislation to combat this very serious problem. Since Christmas, a number of young boys have died because of this dreaded problem.
The petition was compiled by members of the G21 drug rehabilitation group, which consists of mothers, parents and young drug addicts, the local clergy and community workers. They are all trying to do something. They ask that this House should do its very best to pass legislation to combat the problem.
The petition concludes:
Wherefore your Petitioners pray that your Honourable House will pass legislation to combat this problem and to provide more amenities and resources.
And your petitioners, as in duty bound, will ever pray.

To lie upon the Table.

RAOC, Hilton

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]

Mrs. Edwina Currie: At Hilton in my constituency there is a vehicle depot that is run by the Royal Army Ordnance Corps. It covers some 270 acres just outside Derby. I understand that it is responsible for the storage of about 7,000 vehicles of every kind—scooters, cars, taxis, fire engines, ambulances, lorries, Land Rovers: in fact, everything that moves and belongs to the armed forces, right up to huge tank transporters which sometimes block up our local villages. They are not regarded, in technical language, as specialised vehicles. They are "B" vehicles.
On the same site, there is also a REME workshop, whose job it is to repair those vehicles. The whole operation at Hilton is the maintenance and storage of vehicles. It is one great big garage—one of the largest in the country. It covers a very large area. It employs about 250 of my constituents and also constituents of my hon. and learned Friend the Member for Burton (Mr. Lawrence), who wishes to be associated with my remarks.
After the war there were dozens of these depots all over the country. Recently most of them have been closed. Only three are left in England. The others are at Ashchurch and Ludgershall. All of them are now associated in management terms. The other depots specialise in vehicles such as tanks that are known as "A" vehicles, but Hilton is the only depot that is entirely a civilian operation. It reports to military personnel who are based at one of the other depots.
In August 1982, as part of the review of military spending, it was decided by the Director General of Ordnance Services to take a look at Hilton. The question was this: "We reduced the number of depots from about 30 down to 12 and then down to three. Do we need three? Would not two do?" In the aftermath of the Falklands, an investigation team was set up to see whether Hilton should be shut.
My involvement started a year or so later, in 1983, when I was elected to this House. My constituents came to see me and I exchanged letters with Ministers. I have examples of the signatures of every person who has been a Minister in this Department. I asked lots of parliamentary questions. An official visit was arranged. I was delighted to meet Colonel Bowden, and Brigadier Berrigan showed me around. I was most impressed by the quality of the work done there, by the efficiency of the place and by the good humour, flexibility and commitment of the work force at all levels. Therefore, I made representations about this potential closure. Eight months after my visit and nearly two years after the study started, back came the message: Hilton was indeed needed and would not be closed. This came, for example, in a letter from my noble Friend Lord Trefgarne dated 5 July 1984 in which he said:
The study has now been completed and its conclusions recommend a continuing requirement for a Central Vehicle Depot organisation for the forseeable future based on the three vehicle depots at Ashchurch, Hilton and Ludgershall.
That was confirmed a few days later in the answer to a written question that I tabled. It reads:
its main conclusion was to confirm the need for the existing three depots, of which CVD Hilton in South Derbyshire is one."—[Official Report, 10 July 1984: Vol. 63, c. 457.]


So Hilton was needed. However the Ministry of Defence was not satisfied and another study was to be undertaken to see whether it was possible to privatise Hilton. Indeed, the term that has been used in most of the letters since has been to contractorise. From 1984 to now, another two years, they have been investigated all over again. I believe that the report that was the result of that investigation was available in September 1985. I have seen a one-and-a-half page summary of it. Since then we have had silence.
I asked to see the Minister, my noble Friend, but I was told it was not quite appropriate because a decision had been taken. Nothing has been published; no decision has been taken as far as we know, hence this Adjournment debate. I am sure that my hon. Friend the Minister will realise that a patient Job would have got fed up with all that, and would be having a screaming fit by now. After four years of investigating this depot my constituents and I are thoroughly fed up.
What we are all after is a better, cheaper service. In recent years at Hilton the service has been streamlined quite considerably, even though the military commitment has been maintained. In 1979, I am told, there were over 200 industrials working for the RAOC. Now there are 123, and that includes security staff. In 1979 there were more than 100 people working for REME in the workshops. Now there are, I believe, 68, so the industrial staffing numbers have come down by over 50 per cent., from over 300 to 191. In addition, there are approximately 50 non-industrial staff working there.
There has been a ban on recruitment for more than a year for all grades, and the resulting squeeze on manpower has not done Hilton's reputation all that much good, because its job is to get the vehicles out and it has to leave undone other things that are low priority, such as valeting the vehicles. What the majors and the lieutenant-colonels must think of the rather grubby vehicles they are getting I do not know. It does not help the service at all. I should add that all of my figures come from diligent searching in public sources and nobody has contravened the Official Secrets Act. Hilton has been forced as a result to use contract labour, such as contract drivers, willy-nilly, and I am not sure that doing it in this way, almost by the back door, is at all satisfactory. The view taken is that the work has to be done.
The policies of the MOD in recent months have made the continued existence of Hilton even more important. My hon. Friend said on another occasion that much of our MOD work is done in the south of England. Seventy per cent. of military personnel and 60 per cent. of civilians working for the MOD are based in the southern region. Those are areas that do not need the extra jobs, but Derbyshire and Staffordshire do. The south can do without the extra competition for land and for housing, but the north and the midlands are keen to see growth and development and are desperately anxious not to lose what they already have. Unemployment in Derby is 13 per cent. and I have a feeling that is more than in Pirbright and in one or two other places down south that could probably manage with less work.
If the MOD wants to save money while not compromising the service, there are a number of things it could do, probably without contractorising and certainly without investigating the place all over again. But it would involve listening to the people who work at Hilton and who have some good ideas. For example, within the fence of the depot they all work as one—the depot and the

workshops. There is complete flexibility among the work force. Electricians will do fitting, storekeepers will drive, the drivers will put a battery in, and so on, and yet they report separately to RAOC and REME.
They have allocated to their budget two lots of headquarter expenses, all of it military. Therefore, one of their suggestions is to make it a single company. That would be more efficient and would save money. Another proposal is to ask whether civilianisation is not a better way to run this service. Of the three depots only Hilton is entirely civilian: the others are part military. I am told that there are reasons for this, that the military personnel need to know how to run them. Fine, but they can be seconded to Hilton, they do not need to be permanent staff. I am also told that a 24-hour commitment is required and that only the military can provide that.
The experience at Hilton, particularly during the Falklands crisis, surely shows—I hope that my hon. Friend the Minister will confirm this—that civilians can and do offer exactly the same commitment, and do so without question. In any case, the argument about commitment applies just as much if the depot was privatised. The military have no monopoly on patriotism. I think that we dealt with the argument in the debate on the privatisation of the royal ordnance factories.
But the military are expensive. If we compare the salaries of civilians with the appropriate military equivalent, we get some interesting figures. For example, the top rank civilian who works at Hilton costs £17,823. The equivalent military rank is a lieutenant colonel, who costs £32,385—that is only his pay—almost twice as much. The executive officer at Hilton costs the state £11,117. The equivalent rank is a captain, who costs £19,661—again almost twice as much. The lowly clerical officers, the people who actually keep the place going, cost £7,641 each. The equivalent is a staff sergeant costing £14,827, again a ratio of almost two to one. May I emphasise that the military costs are only pay, national insurance, pension and gratuity costs? If we add accommodation costs and the other little extras that the military have, such as school fees, the cost of employing a soldier, especially a senior soldier, instead of a civilian, become astronomical. I believe that the case is firmly made that it is cheaper to have civilians, such as my constituents, with no loss of efficiency in service.
The case made by the people who work there was summed up best, not in my words, but in the words of Mr. O'Hara, who is one of the union representatives, in a letter dated 24 July 1985, in which he said:
"FACT We at Hilton can issue vehicles more efficiently, more cheaply than the other Depot with a military presence.
FACT We have greater flexibility of labour than the other depot with military management.
FACT We have a loyal work force who, when called upon, can, and do, work the same hours and often more than our military counterparts, sometimes if needed on 24 hour call out, many with some 17–20 years service to the crown behind them …
FACT We are a shining example of how to run a Vehicle Depot cheaply and efficiently …
FACT We have been studied countless times for a number of reasons and every study has been sponsored by the military. It's time the picture was looked at by an independent body.
He went on to say—I have a lot sympathy with this—
The truth is that we are an embarrassment because of our efficiency.
My constituents are worried and suspicious about some of the advice that my hon. Friend the Minister has been


given. If Hilton were to shut, we would lose the strategic benefits of having our vehicles on more than one site, and we would lose a site giving major employment in an area not overly well endowed with employment. If Hilton were to be privatised we would disrupt an excellent and smoothly running service. We would probably save very little. Indeed, redundancy costs would make it quite an expensive operation.
In either case, we would lose the dedicated and loyal service of a first-class work force and we would end up with something less efficient in both performance and cost. But if Hilton were allowed to stay open, with some of the ideas of the work force put into practice, the service would benefit, the Ministry of Defence would benefit and my constituents could continue to be as fanatically proud of the work that they do for our nation as they are now, and quite rightly so. I hope that my hon. Friend will consider these points and set our minds at rest tonight.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): I congratulate my hon. Friend the Member for Derbyshire, South (Mrs. Currie) on her good fortune in securing this Adjournment debate. I welcome the opportunity to give as full a statement as I can about the Royal Army Ordnance Corps vehicle sub-depot at Hilton. Before dealing with the more specific issues raised by my hon. Friend I think it would help if I were first to explain the background against which decisions concerning support to the Army are made.
It is a major objective of this Administration to instil into all areas of the public sector a much greater awareness of costs and cost-effectiveness. We have done much, for example, to encourage the participation of the private sector in support of those administrative activities which it is not strictly necessary to have done by MOD employees. The taxpayer is already benefiting from greater competition, either as resources are released for more effective use elsewhere or where cost-cutting reduces the burden the public sector imposes on the economy. This is evident, for example, in the way in we have been able to reduce the size of the Civil Service, so that expenditure on salaries, and so on, is correspondingly lower than it would otherwise have been.
The financial management initiative is a catalyst for much work in the Ministry of Defence, in part aimed at improving the knowledge that managers at all levels have of their costs. Indeed, some of the studies to which I shall refer later result from the more creative thinking which the FMI has encouraged.
As I have said before, it is a paramount point of principle that we have a duty to the taxpayer to see that defence funds are spent only on essential activity, and spent in the most cost-effective manner. In the defence support area it is the policy of the Government to retain activities in the public sector only where this is operationally essential or where there is a clear advantage to the taxpayer. In this way, we aim to extend the scope of activity which benefits from the effects of competition.
Support for the army, and logistic support in the case of the vehicle sub-depot at Hilton, must be considered against the background I have just outlined. More

important, resources released from the support area can be redeployed to front-line and other operational areas—from the "tail" to the "teeth", as we put it.
I turn now to the Hilton situation in particular. The vehicle sub-depot at Hilton—as my hon. Friend well knows—is about 15 miles from Derby and occupies a site of about 250 acres. It employs some 236 civilian staff and holds about 6,500 vehicles.
It is one of three vehicle depots which between them receive, inspect, maintain, store and issue all Army vehicles—from tanks to trailers, from cars to cranes. They also handle vehicles for the Royal Navy and the Royal Air Force.
The other two depots are Ludgershall in Wiltshire, which deals with armoured vehicles—"A" vehicles—and Ashchurch in Gloucestershire, which, together with Hilton, processes the remainder. Hilton's main work load involves "soft-skinned" vehicles—"B" vehicles—which are identical with, or very similar, to commercially available vehicles. Hilton is wholly civilian manned; the other depots are staffed by both military and civilian personnel.
I and my fellow Ministers pay a tribute, too, to our civil servants who serve us so well in so many different capacities and especially at Hilton. I know how much, too, the Army appreciates their loyal service in carrying out their important role. I thank my hon. Friend for the opportunity to make these remarks. I know how committed she is to the welfare of the Hilton work force.
Clearly, I accept the point that there can be valuable economies from replacing service personnel with civilian staff. Indeed, it is quite proper to do so where this can sensibly release soldiers for service in front line units. In the case of the two other depots, however, the military presence is justified by the mobilisation and reinforcement roles which they are assigned in a period of tension or war.
My hon. Friend made reference to possible improvements to costs and efficiency in our current vehicle depot operations by rationalising the management structures of the depots and their associated workshops. The professional oversight of all workshop operations in the Army is the proper responsibility of the Royal Electrical and Mechanical Engineers. They are responsible for technical standards and practices, as well as for training and various aspects of interposting, for military and civilian mobile staff alike. It therefore makes no real sense, except in the case of contractorisation, for 91 Vehicle Workshop at Hilton to be disconnected from REME's wider control, and I have to say that significant economies are unlikely to accrue from an amalgamation of the storehouse and workshop elements. The same applies in even greater measure to the REME workshops at Ashchurch and Ludgershall, which reflect the discrete specialisms of the supply and the engineering staffs.
Our experience of involving the private sector and introducing competition into Government activity has shown significant savings. Hilton's work load embraces vehicles that are in everyday use up and down the country. It was quite appropriate, therefore, to consider whether there would be advantage in putting the work out to contract. We mounted a feasibility study late in 1984 and received a report which recommended that the idea be pursued. In the normal course of events, we would have then consulted the work force and its representatives about our resulting proposals. This would have taken place last autumn.
However, the armed forces, and the Army in particular, are dependent on vehicles for all types of operational and support activities, and our vehicle holdings are considerable. It is not surprising, therefore, that recently we have been looking even more closely at ways and means of ensuring that we get maximum value from expenditure in this area and that our vehicle holdings are no more than the minimun needed for our purposes. There are a number of studies in train which could impact upon vehicle requirements, and thus on the numbers we need to keep in store. We are examining, for example, greater use of the private sector for the provision of the Army's day-to-day administrative transport. Vehicle leasing is a possibility, and there are other examinations of both our holdings and our purchasing arrangements under way.
What this means is that we are currently unable to forecast with sufficient accuracy Hilton's workload over the next four to five years, and so we are in no position—on that count alone—to frame a viable tendering exercise to which industry could reasonably be expected to respond. The result is that the Hilton work force, knowing full well that a study into contracting-out has taken place, and, indeed, having been given a summary of its findings, has so far heard nothing further about progress. I naturally regret that, but we have not been in a position to say anything useful while the other studies continue.
The climate of sustained uncertainty endured by the work force is most unfortunate, and I should have preferred to eliminate it entirely. However, as I have mentioned, we are still engaged in studies which might materially affect the numbers of vehicles that we need to process through or store in the depots. Certainly, in this

situation, we cannot sensibly embark on contracting out, and I am tonight taking the opportunity to announce that it is to be suspended.
But, as I said, I cannot remove the air of doubt entirely. These very studies will make it necessary for us to consider whether the overall load will drop sufficiently for our vehicle support needs to be met by just two depots. This is a very complex area, involving, not only our internal vehicle management arrangements, but our system of the procurement and delivery of new equipment. If it emerges that it may be possible for two depots to meet our needs, we shall have to be clear what impact, if any, there will be on the existing arrangements with our vehicle suppliers.
My hon. Friend raised our intention to ease the concentration in the south of defence units and establishments by encouraging relocation northwards. As I said in reply to the hon. Member for Bolton, North-East (Mr. Thurnham):
This is a matter for continuing review as opportunities arise, such as when major investment is required … all proposals will need to stand on their operational and economic merits."—[Official Report, 11 March 1986; Vol. 93, c. 802.]
It will be no different in our consideration of the Army vehicle depots.
It is unlikely that we shall be able to reach conclusions quickly, and though I know that my hon. Friend would no doubt prefer that her constituents were given a clear indication of the future, I fear that the necessary work will not be completed before the end of this year. Nevertheless, an announcement will be made at the earliest possible moment.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Eleven o'clock.